Question

In May direct labor was 35% of conversion cost. If the manufacturing overhead for the month was $116,350 and the direct materials cost was $20,200, the direct labor cost was:

Answer 1

Direct labor= $62,650

Step-by-step explanation:

Giving the following information:

In May direct labor was 35% of conversion cost.

The manufacturing overhead for the month was $116,350.

The conversion costs are the sum of the direct labor and the manufacturing overhead:

Overhead= 65%= 116,350

Direct labor= 35%= ?

First, we need to determine the total amount of conversion costs:

Conversion costs= 116,350/0.65= 179,000

Now, the direct labor cost:

Direct labor= 179,000*0.35

Direct labor= $62,650