Woodcarving Co.incurred the following costs during May: $$\begin{array} { l l }
\text { Conversion costs } & \$ 460,000 \
\text { Prime costs } & \$ 390,000 \
\text { Manufacturing overhead } & \$ 315,000
\end{array}$$ What was the amount of direct materials and direct labor used in May? $$\begin{array} { c c c }
& \text { Direct materials } & \text { Direct labor } \
\text { A) } & \$ 100,000 & \$ 295,000 \
\text { B) } & \$ 105,000 & \$ 215,000 \
\text { C) } & \$ 245,000 & \$ 145,000 \
\text { D) } & \$ 70,000 & \$ 75,000
\end{array}$$
A)Option A
B)Option B
C)Option C
D)Option D

Question

Woodcarving Co.incurred the following costs during May: $$\begin{array} { l l } 
\text { Conversion costs } & \$ 460,000 \
\text { Prime costs } & \$ 390,000 \
\text { Manufacturing overhead } & \$ 315,000
\end{array}$$ What was the amount of direct materials and direct labor used in May? $$\begin{array} { c c c } 
& \text { Direct materials } & \text { Direct labor } \
\text { A) } & \$ 100,000 & \$ 295,000 \
\text { B) } & \$ 105,000 & \$ 215,000 \
\text { C) } & \$ 245,000 & \$ 145,000 \
\text { D) } & \$ 70,000 & \$ 75,000
\end{array}$$
A)Option A
B)Option B
C)Option C
D)Option D

Quizplus · Accepted Answer

Prime costs consist of direct materials and direct labor. Conversion costs are the sum of direct labor and manufacturing overhead. Given that prime costs are $390,000 and manufacturing overhead is $315,000, we can calculate direct labor by subtracting manufacturing overhead from conversion costs ($460,000 - $315,000 = $145,000). Then, direct materials can be found by subtracting direct labor from prime costs ($390,000 - $145,000 = $245,000). Therefore, the amount of direct materials and direct labor used in May was $245,000 and $145,000, respectively.

Woodcarving Co What Was the Amount of Direct Materials and Direct Labor