Question

Manufacturing overhead was applied to work in process at 150 percent (1.5 times) direct labor dollars. Applied manufacturing overhead for the year was 40 percent of the total manufacturing cost during the year. Required: Compute actual direct material used, actual direct labor, and applied manufacturing overhead. (Hint: The total of these costs is $16,500,000.)

Answer 1

Answer:

$6,600,000 ; $4,400,000 and $5,500,000

Explanation:

The computation is shown below:

Manufacturing overhead is

= Total manufacturing cost × manufacturing overhead percentage

= $16,500,000 × 40%

= $6,600,000

The direct labor is

= Manufacturing overhead ÷ direct labor percentage

= $6,600,000 ÷ 150%

= $4,400,000

And, the direct material used is

= Total manufacturing cost - direct labor - manufacturing overhead

= $16,500,000 - $4,400,000 - $6,600,000

= $5,500,000