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26 August, 10:45

In May direct labor was 40% of conversion cost. If the manufacturing overhead for the month was $120,600 and the direct materials cost was $29,200, the direct labor cost was:

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  1. 26 August, 11:01
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    direct labor = $80,400

    Explanation:

    Giving the following information:

    In May direct labor was 40% of conversion cost. The manufacturing overhead for the month was $120,600.

    The conversion costs are the sum of direct labor and manufacturing overhead.

    Conversion costs = 120,600/0.6 = 201,000

    direct labor = 210,000*0.4 = 80,400
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