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in may direct labor was 45% of conversion cost. if the manufacturing overhead for the month was $73,700 and the direct materials cost was $25,200, the direct labor cost was:

Respuesta :

In May direct labor was 45% of conversion cost. if the manufacturing overhead for the month was $73,700 and the direct materials cost was $25,200, the direct labor cost was  $60,300

Given,

Direct labor accounted for 45% of conversion costs.

For the month, the manufacturing overhead was $73,700.

The cost of direct materials was $25,200.

Since, the formula for conversion cost is:

[tex]Conversion Cost = Direct Labor + Manufacturing Overhead[/tex]

[tex]Conversion Cost = Direct Labor + $73,700[/tex]

[tex]Conversion Cost = (0.45 * Conversion Cost) + $73,700[/tex]

[tex]0.55 * Conversion Cost = $73,700[/tex]

[tex]Conversion Cost = $73,700 / 0.55[/tex]

Conversion Cost = $134,000

Since, we know that,

[tex]Direct Labor = 0.45 * Conversion Cost[/tex]

= 0.45 × $134,000

= $60,300

Hence, the direct labor cost is  $60,300.

Learn more about manufacturing overhead:

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