Factory overhead costs for a given period were 2 times as much as the direct material costs.Prime costs totaled $8,000.Conversion costs totaled $11,350.What are the direct labor costs for the period?
A)$4,650.
B)$3,560.
C)$4,200.
D)$3,860.
$11,350 = Direct Labor Costs + Factory Overhead Costs
Direct Labor Costs = $8,000 - Direct Materials Costs
Factory Overhead Costs = 2(Direct Materials Costs)
Solve for Direct Materials Costs via substitution:
$11,350 = ($8,000 - Direct Materials Costs)+ 2(Direct Materials Costs)
Direct Materials Costs = $3,350
Direct Labor Costs = $8,000 - $3,350 = $4,650

Question

Quizplus · Accepted Answer

We can solve for direct labor costs by using the formula for conversion costs: Conversion Costs = Direct Labor Costs + Manufacturing Overhead. We are given that conversion costs are $11,350. We also know that prime costs are the sum of direct materials and direct labor costs, which is $8,000. Therefore, direct labor costs can be calculated as:

Direct Labor Costs = Conversion Costs - Manufacturing Overhead 
Direct Labor Costs = $11,350 - 2(Direct Materials Costs)  (since manufacturing overhead is twice as much as direct materials costs) 
Direct Labor Costs = $11,350 - 2($3,350) 
Direct Labor Costs = $11,350 - $6,700 
Direct Labor Costs = $4,650

Therefore, the correct answer is A.

Factory Overhead Costs for a Given Period Were 2 Times