Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost.If Job 501 shows $21,000 of manufacturing overhead applied,the direct labour cost on the job was:

Question

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The manufacturing overhead applied is 70% of the direct labor cost. Therefore, if $21,000 is the overhead applied, the direct labor cost is $21,000 / 0.70 = $30,000.

Knowlton Company Applies Overhead to Completed Jobs on the Basis