Question

Greer Company developed the following data for the current year:

Beginning work in process inventory $ 136,000
Direct materials used 208,000
Actual overhead 176,000
Overhead applied 184,000
Cost of goods manufactured 900,000
Total manufacturing costs 856,000
How much is Greer Company's direct labor cost for the year?

Answer 1

Greer Company's direct labor cost for the year is calculated by subtracting the direct materials used and the overhead applied from the total manufacturing costs, resulting in a direct labor cost of $464,000.

Step-by-step explanation:

To determine Greer Company's direct labor cost for the year, we need to consider the total manufacturing costs and the known data points relating to materials and overhead. The formula we use is Total Manufacturing Costs = Direct Materials + Direct Labor + Overhead Applied.

From the data provided:

• Total Manufacturing Costs = $856,000
• Direct Materials Used = $208,000
• Overhead Applied = $184,000

Using these values, we can rearrange the formula to solve for Direct Labor:

Direct Labor = Total Manufacturing Costs - Direct Materials Used - Overhead Applied

Direct Labor = $856,000 - $208,000 - $184,000

Direct Labor = $464,000

Therefore, the direct labor cost for Greer Company for the year is $464,000.