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31 March, 21:17

During the month of September, direct labor cost totaled $11,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during September were $73,000, the manufacturing overhead was:

(A) $16,500

(B) $27,500

(C) $62,000

(D) $45,500

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Answers (1)
  1. 31 March, 21:45
    0
    The correct answer is D: Manufacturing overhead = $45500

    Explanation:

    Giving the following information, we need to calculate the amount of manufacturing head.

    Direct labor = $11000

    Direct labor is 40% of prime costs

    Total manufactured cost is = $73000

    First, we need to calculate the direct material:

    Prime cost = direct material + direct labor

    If direct labor is 40% of prime costs, then:

    Direct material = (11000*60/40=16500

    Now, the manufactured cost formula is:

    Manufactured cost = direct material + direct labor + manufacturing overhead

    By rearranging the formula:

    Manufacturing overhead = Manufactured costs - direct material - direct labor = 73000 - 16500-11000=$45500
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Home » Business » During the month of September, direct labor cost totaled $11,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during September were $73,000, the manufacturing overhead was: (A) $16,500 (B) $27,500 (C) $62,000 (D) $45,500
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