Question

Abburi Company's manufacturing overhead is 30% of its total conversion costs. If direct labor is $105,700 and if direct materials are $24,400, the manufacturing overhead is:

Answer 1

Answer:

45,300

Explanation:

The manufacturing overhead is 30%

Direct labour is $105,700

Direct material is $24,400

Therefore the manufacturing overhead can be calculated as follows

The first step is to find the conversion costs

1 -30/100CC= 105,700

1-0.3CC= 105,700

0.7CC= 105,700

CC= 105,700/0.7

CC= 151,000

= 151,000-105,700

= 45,300

Hence the manufacturing overhead is 45,300