Levine Company
Levine Company has a job-order costing system and an overhead application rate of 125 percent of direct labor cost.Job #123 is charged with direct material of $18,000 and overhead of $9,000.Job #124 has direct material of $4,500 and direct labor of $12,000.
Refer to Levine Company.What amount of direct labor cost has been charged to Job #123?

Question

Quizplus · Accepted Answer

Overhead is applied at 125% of direct labor cost. Job #123 has overhead of $9,000, so its direct labor cost must be $9,000 / 125% = $7,200.

Levine Company Levine Company Has a Job-Order Costing System and an Overhead