Job 590 has a total cost of $28,700. It has been charged manufacturing overhead costs of $7900. The rate is 80% of direct labor. What was the amount of direct materials charged to the job?

Question

Quizplus · Accepted Answer

To find the amount of direct materials charged to the job, we need to first find the amount of direct labor charged. 
Since the manufacturing overhead rate is 80% of direct labor, we can set up the equation: 
Manufacturing overhead = 0.8 x Direct labor

$7,900 = 0.8 x Direct labor 
Direct labor = $9,875

To find the amount of direct materials charged, we can use the formula: 
Total cost = Direct materials + Direct labor + Manufacturing overhead

$28,700 = Direct materials + $9,875 + $7,900 
Direct materials = $10,925

Therefore, the answer is B) $10,925.

Job 590 Has a Total Cost of $28,700