Question

Wilturner Company incurs $76,000 of labor related directly to the product in the Assembly Department, $25,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $12,000 of labor for services that help production in both the Assembly and Finishing departments.
The amount of direct labor and factory overhead respectively are:

a) $88,000 and $25,000.
b) $76,000 and $37,000.
c) $101,000 and $12,000.
d) $113,000 and $0.
e) $76,000 and $12,000.

Answer 1

Answer:

correct option is b) $76,000 and $37,000

Explanation:

given data

Labor related directly to the product = $76,000

labor not directly related to the product = $25,000

labor for services = $12,000

solution

As here Direct Labor is express as

Direct Labor  = Labor related directly to the product   ...............1

so

Direct Labor = $76,000

and

Factory Overhead will be as

Factory Overhead = Labor not directly related to the product + labor for services  ,................................2

put here value and we get

Factory Overhead  $25000 + $12000

Factory Overhead = $37,000

so here correct option is b) $76,000 and $37,000