Factory overhead costs for a given period were 1.5 times as much as the direct material costs. Prime costs totaled $15,700. Conversion costs totaled $22,880. What are the direct labor costs for the period?
Prime cost = direct materials + direct labor | ||||||||
conversion cost = direct labor + factory overhead | ||||||||
let direct material cost be x | ||||||||
so factory overhead = 1.5x | ||||||||
conversion cost - prime cost | ||||||||
(Direct labor + factory overhead )-(direct materials+direct labor)=22880-15700 | ||||||||
factory overhead - - direct materials = | 7180 | |||||||
1.5x -x = 7180 | ||||||||
x = 7180/.5 | ||||||||
14360 | ||||||||
when materials is $14,360 | ||||||||
so direct labor =15700-14360 | ||||||||
1340 | ||||||||
so factory overhead =22880-1340 | ||||||||
21540 | ||||||||
direct labor costs =$1,340 | answer | |||||||
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