Gallagher Company Gallagher Company has a job-order costing system and an overhead application rate of 120 percent of direct labor cost.Job #63 is charged with direct material of $12,000 and overhead of $7,200.Job #64 has direct material of $2,000 and direct labor of $9,000.
Refer to Gallagher Company.What amount of direct labor cost has been charged to Job #63?

Question

Quizplus · Accepted Answer

The overhead for Job #63 is $7,200, which is 120% of the direct labor cost. Therefore, the direct labor cost is $7,200 / 1.2 = $6,000.

Gallagher Company Gallagher Company Has a Job-Order Costing System and an Overhead