A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used. 106,400.

A) $106,400.
B) $113,120.
C) $30,240.
D) $211,680.
E) $324,800.

Question

A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used. 106,400.

A) $106,400.
B) $113,120.
C) $30,240.
D) $211,680.
E) $324,800.

Angelica Georges · Accepted Answer

Final Answer : B, Explanation :  To determine the cost of direct materials used, we need to use the following formula:Direct Materials + Direct Labor + Overhead = Total Manufacturing CostWe know that the overhead rate is 60% of direct labor cost, so we can rewrite the formula as:Direct Materials + Direct Labor + (60% x Direct Labor) = Total Manufacturing CostSimplifying this equation, we get:Direct Materials + 1.6 x Direct Labor = Total Manufacturing CostWe are given that the total manufacturing cost is $300,000 and that the direct labor cost is $106,400. We can use these numbers to solve for the cost of direct materials:Direct Materials + 1.6 x $106,400 = $300,000Direct Materials = $300,000 - 1.6 x $106,400Direct Materials = $300,000 - $170,240Direct Materials = $129,760Therefore, the cost of direct materials used is $129,760, which is answer choice B.

A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used. 106,400.

A) $106,400.
B) $113,120.
C) $30,240.
D) $211,680.
E) $324,800.

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A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used. 106,400. A) $106,400.B) $113,120.C) $30,240.D) $211,680.E) $324,800.

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Learning Objectives

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Related questions

A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used. 106,400.

A) $106,400.
B) $113,120.
C) $30,240.
D) $211,680.
E) $324,800.