Finished goods Inventory Is 184 000If overhead applied to th

Finished goods Inventory Is $184 000.If overhead applied to these goods is $75,000, and the over is120% of direct labor, how much direct materials cost was incurred in producing the Inventory? intermediate calculations and final answer to nearest whole dollar) (Round your O $46.500 O $44 500 O $19,000 O $90,000 o $62,500

Solution

Answer =1) Overhead Rate: Overhead rate are always applied on the direct labour. in the given question overhead rate are 120% of the direct labour . So it means if the direct labour are $ 100 than the overhead are $ 100 X 120% = $ 120 CALCULATION OF THE DIRECT MATERIAL COST INTRODUCED IN PRODUCTION Value of the finished Goods inventory = $                  1,84,000 Less: Overhead Expenses $                      75,000 Less: Direct Labor Expenses ($ 75,000 X 100/120) = $                      62,500 Value of the inventory = $                      46,500 Answer = Option 1 = $ 46,500 Answer =2) CALCULATION OF THE TOTAL COST OF THE JOB Direct Material $                            340 Wages ( 20 Hrs X $ 12) = $                            240 Overhead Expenses ( 20 Hrs X $ 18) $                            360 Total Cost $                            940 Answer = Option 4 = $ 940