The total manufacturing costs incurred for the year are $200,000. Overhead cost was 60% of direct labour cost, and direct materials cost was $25,000. Direct labour cost was:

Question

Quizplus · Accepted Answer

- Let's use the formula: Total manufacturing costs = Direct materials + Direct labor + Overhead
- We know that Direct materials cost was $25,000
- We also know that Overhead cost was 60% of Direct labour cost, which can be written as Overhead = 0.6(Direct labor)
- Substituting the given values into the formula:
$200,000 = $25,000 + Direct labour + 0.6(Direct labour)
- Simplifying, we get:
$200,000 - $25,000 = 1.6(Direct labour)
$175,000 = 1.6(Direct labour)
Direct labour = $175,000 / 1.6 = $109,375, which is choice B.

The Total Manufacturing Costs Incurred for the Year Are $200,000