Question

Wilturner Company incurs $83,000 of labor related directly to the product in the Assembly Department, and...

Wilturner Company incurs $83,000 of labor related directly to the product in the Assembly Department, and $32,000 of labor related to the Assembly Department as a whole, and $19,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:

Multiple Choice

  • $83,000 and $51,000.

  • $115,000 and $19,000.

  • $102,000 and $32,000.

  • $134,000 and $0.

  • $83,000 and $19,000.

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Answer #1

Ans. Amount of direct labor will be labor cost directly related to specific product or service. Amount of factory overhead includes indirect labor cost i.e., labor cost incurred for more than one product or service.   

Amount of direct labor = $ 83,000

Amount of factory overhead =  labor related to the Assembly Department as a whole + labor for services that help in production in both the Assembly and Finishing departments

= $ 32000 + $ 19000

= $ 51,000

Option A is correct ($83,000 and $51,000)

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