Question

MC Qu. 123 The ending inventory of finished... The ending inventory of finished goods has a total cost of $9,800 and consists of 700 units. If the overhead applied to these goods is $3,726, and the overhead rate is 81% of direct labor, how much direct materials cost was incurred in producing these units

Answer 1

$5,200

Step-by-step explanation:

Given the above information,

Direct labor = $3,726 / 0.81 = $4,600

But,

Total cost = Direct material + Direct labor + Overhead

Fixing the values, we'll have

$9,800 = Direct materials + $4,600 + $3,726

Direct materials = $9,800 - $4,600

Direct materials = $5,200

Therefore $5,200 raw materials cost was incurred in producing these units.