Woodcarving Co.incurred the following costs during 2010:
What was the amount of direct materials and direct labor used for the year?
A)A
B)B
C)C
D)D = Labor + $315,000 = $460,000;Labor = $145,000.Materials + $145,000 = $390,000 = Prime Costs.Materials = $245,000

Question

Woodcarving Co.incurred the following costs during 2010: 
What was the amount of direct materials and direct labor used for the year? 
A)A 
B)B 
C)C 
D)D = Labor + $315,000 = $460,000;Labor = $145,000.Materials + $145,000 = $390,000 = Prime Costs.Materials = $245,000

Quizplus · Accepted Answer

Direct materials are the cost of materials that can be easily traced to the production of goods, and direct labor is the cost of labor that can be easily traced to the production of goods. In this case, we are given the total amount of prime costs (which is the sum of direct materials and direct labor), and the total amount of labor. Using this information, we can calculate the amount of direct materials as follows:

Prime Costs = Direct Materials + Direct Labor
$390,000 = Direct Materials + $145,000
Direct Materials = $245,000

Therefore, the amount of direct materials used during the year was $245,000. We do not have enough information to determine the amount of indirect materials or indirect labor.

Woodcarving Co.incurred the Following Costs During 2010