Question

in+may+direct+labor+was+40%+of+conversion+cost.+if+the+manufacturing+overhead+for+the+month+was+$114,600+and+the+direct+materials+cost+was+$24,400,+the+direct+labor+cost+was:

Answer 1

To find the direct labor cost when it represents 40% of the conversion cost, calculate the total conversion cost using the given manufacturing overhead and then apply the percentage. The direct labor cost in this scenario is determined to be $76,400.

Step-by-step explanation:

The question relates to the calculation of direct labor cost based on given percentages and amounts related to manufacturing overhead and direct materials cost. In manufacturing, conversion cost is the sum of direct labor and manufacturing overhead. Since direct labor is 40% of the conversion cost, manufacturing overhead must be the remaining 60%. Given that the manufacturing overhead is $114,600, we can first find the total conversion cost and then calculate 40% of it to find the direct labor cost.

Step-by-Step Calculation:

1. Determine the total conversion cost by dividing the manufacturing overhead by 60% because it represents 60% of the conversion cost. ($114,600 / 0.60)
2. Calculate the direct labor cost by taking 40% of the total conversion cost (result from step 1 multiplied by 0.40).

Applying this calculation:

1. Total conversion cost = $114,600 / 0.60 = $191,000
2. Direct labor cost = $191,000 * 0.40 = $76,400

Therefore, the direct labor cost was $76,400.