Question

Furniture Co. incurred the following costs during 2016: Conversion costs $240,000 Prime costs $210,000 Manufacturing overhead $115,000 What was the amount of direct materials and direct labor used for the year

Answer 1

the amount of direct material and direct labor used is $85,000 and $125,000 respectively

Step-by-step explanation:

The computation of the direct material and the direct labor used is shown below:

As we know that

Conversion cost = Direct labor + manufacturing overhead

And, the prime cost = direct material + direct labor

So the direct labor is

= Conversion cost - manufacturing overhead

= $240,000 - $115,000

= $125,000

Now the direct material is

= Prime cost - direct labor

= $210,000 - $125,000

= $85,000

hence, the amount of direct material and direct labor used is $85,000 and $125,000 respectively