Question

In May direct labor was 35% of conversion cost. If the manufacturing overhead for the month was $102,050 and the direct materials cost was $23,800, the direct labor cost was:____________

Answer 1

direct labor cost is = $54,950

Step-by-step explanation:

step 1

calculate conversion cost

conversion cost = direct labor cost + manufacturing overhead cost

where direct labor cost is 35% conversion cost, therefore we have

conversion cost ( 1 - 0.35) = manufacturing cost

conversion cost
`= (102,050)/(1-0.35)`

conversion cost = $157000

step 2

we know that

direct labor cost is 35% conversion cost

hence, direct labor cost is = $54,950