Question

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?

Answer 1

direct labor= $30000

Step-by-step 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