Question

During the month of May, direct labor cost totaled $20,405 and direct labor cost was 55% of prime cost. If total manufacturing costs during May were $73,600, the manufacturing overhead was:

Answer 1

Answer:

$36,500

Explanation:

Calculation for manufacturing overhead

Direct labor = $20,405

The Total manufacturing cost = $73,600

Prime cost = Direct labour cost ÷0.55

Prime cost = $20,405 ÷ 0.55 =

Prime cost = $37,100

Using this formula for Tot Manufacturing cost

Total manufacturing cost = Prime cost + Manufacturing overhead cost

$73,600 = $37,100 + Manufacturing overhead cost

Manufacturing overhead cost = $36,500

Therefore tthe manufacturing overhead was:$36,500