Question

In sept, direct labor was 40% of conversion cost. if the manufacturing overhead for the month was $66,000 and the Direct materials cost was $20,000, the direct labor cost was:

A)$44,000
B)$13,333
C)$30,000
D)$ 99,000

Answer 1

The direct labor cost for the month is $34,400.

Step-by-step explanation:

To find the direct labor cost, we need to first calculate the conversion cost. The conversion cost is the sum of direct labor and manufacturing overhead. Given that direct labor is 40% of conversion cost, we can set up the equation:

Direct Labor = 40% * Conversion Cost

Since the manufacturing overhead for the month was $66,000 and the direct materials cost was $20,000, we can calculate the conversion cost:

Conversion Cost = Manufacturing Overhead + Direct Materials Cost

Plugging in the values:
Conversion Cost = $66,000 + $20,000 = $86,000

Now, we can calculate the direct labor cost:
Direct Labor = 40% * $86,000 = $34,400