A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used. Work in Process Inventory Finished Goods Inventory DR CR DR CR Beg. Bal. 100,800 Beg. Bal. 118,200 D. M.? 324,800 301,000 D. L.? O. H.? F. G.? End. Bal. 131,040 End. Bal. 142,000 Factory Overhead DR CR 93,240 90,720

Question

Moshe Tucker

Business

30 December, 01:05

A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used. Work in Process Inventory Finished Goods Inventory DR CR DR CR Beg. Bal. 100,800 Beg. Bal. 118,200 D. M.? 324,800 301,000 D. L.? O. H.? F. G.? End. Bal. 131,040 End. Bal. 142,000 Factory Overhead DR CR 93,240 90,720

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Charlize Bowers · Answer 1

Materials used in production 113,120

Explanation:

The credited overehad will be 60% of direct labor

thus: 90,720/0.6 = 151,200 direct labor

Then debit for finished good is the WIP completed during the period so we can use it to solbe for material now:

Beginning WIP 100,800

Materials X

Labor 151,200

Overhead 90,720

Transferred-out (324,800)

Ending WIP 131,040

Materials = Ending WIP + transferred-out - DL - MO

Materials = 113,120