The following information pertains to the August manufacturing activities of Griss Co.: Beginning work-in-progress (BWIP) : $12,000 Ending work-in-progress (EWIP) : $10,000 Cost of goods manufactured (COGM) : $97,000 Direct materials issued to production: $20,000 Factory overhead is assigned at 150% of direct labor. What was the August direct labor?

Question

Ayden

Business

23 January, 12:53

The following information pertains to the August manufacturing activities of Griss Co.: Beginning work-in-progress (BWIP) : $12,000 Ending work-in-progress (EWIP) : $10,000 Cost of goods manufactured (COGM) : $97,000 Direct materials issued to production: $20,000 Factory overhead is assigned at 150% of direct labor. What was the August direct labor?

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Jayson · Answer 1

direct labor = $30000

Explanation:

With the following information we need to calculate the direct labor:

Beginning work-in-progress (BWIP) : $12,000

Ending work-in-progress (EWIP) : $10,000

Cost of goods manufactured (COGM) : $97,000

Direct materials issued to production: $20,000

Factory overhead is assigned at 150% of direct labor.

We know that:

Cost of good manufactured = Beginning work in progress + direct materials of the period + direct labor + manufactured overhead - ending work in progress

97000=12000 + 20000 + direct labor + 1,5*direct labor - 10000

direct labor = (97000-12000-20000+10000) / 2,5

direct labor = 30000

Manufacturing overhead = 30000*1,5 = 45000

Comprobation:

cost of manufactured goods = 12000+20000+30000+45000-10000=97000