Question

Finished goods inventory is $197,000. If overhead applied to these goods is $72,000, and the overhead rate is 150% of direct labor, how much direct materials cost was incurred in producing the inventory

Answer 1

Answer:

77,000

Step-by-step explanation:

If 72,000 is 150% of direct labor, then direct labor is 48,000 (72000/1.5)

direct labor 48000

overhead.    72000

total.           120,000

total costs:           197,000

less total above:  120,000

=material costs.     77,000