Answer
Iron City incurred $150,000 in variable manufacturing overhead in 2014.
Work Step by Step
To calculate the variable manufacturing overhead incurred in 2014, we need to subtract the known costs of direct materials and direct manufacturing labor from the total variable manufacturing costs. Here are the given figures:
Direct Materials Costs = \$880,000 (given)
Direct Manufacturing Labor Costs = \$400,000 (given)
Now, we can calculate the variable manufacturing overhead:
Variable Manufacturing Overhead = Total Variable Manufacturing Costs - (Direct Materials Costs + Direct Manufacturing Labor Costs)
Variable Manufacturing Overhead = \$1,430,000 (total variable manufacturing costs) - (\$880,000 + \$400,000)
Variable Manufacturing Overhead = \$150,000
