Trippett Industries manufactures cleaning products. During the year, the company spent $600,000 on chemicals and $728,000 on conversion costs. Overhead is applied at a rate of 180% of direct labor costs. How much did the company spend on manufacturing overhead during the year?

Question

Quizplus · Accepted Answer

To find the manufacturing overhead, we first need to determine the direct labor costs. Since overhead is applied at 180% of direct labor costs, let x be the direct labor costs. Then, 1.8x is the overhead. The conversion costs are the sum of direct labor and overhead, so x + 1.8x = $728,000. Solving for x gives x = $260,000. Therefore, the overhead is 1.8 * $260,000 = $468,000.

Trippett Industries Manufactures Cleaning Products