Question

Ring Company designs and builds jewelry. During June it had applied overhead of $120,000. Overhead is applied at the rate of 75% of direct labor cost. Direct labor wages average $20 per hour.How many direct labor hours did Ring Company have for the month of June?

Answer 1

Answer:

4.500

Explanation:

According with the information say that the $120.000 correspond to overhead to the rate of 75% of direct labor force, so you have to calculate the portion that is directed to the direct labor cost:

Direct labor cost: $120.000 * 75%

Direct labor cost: $ 90.000

Now you know that the average wages per hour of the direct labor force is $20. Now you have to divide the direct labor cost by the average salary per hour to calculate the number of hours worked in June.

Number of hours = $ 90.000/$20

Number of hours = 4.500