The ending inventory of finished goods has a total cost of $10,000 and consists of 500 units.If the overhead applied to these goods is $2,000,and the overhead rate is 50% of direct labor,how much direct materials cost was incurred in producing these units?
A) $4,000
B) $6,000
C) $3,000
D) $7,000
E) $10,000

Question

Quizplus · Accepted Answer

DM + DL + OH = Total cost
DM + ($2000/.5) + $2,000 = $10,000
DM + $4,000 + $2,000 = $10,000
DM = $4,000

The Ending Inventory of Finished Goods Has a Total Cost