A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used:

A) $106,400
B) $113,120
C) $30,240
D) $211,680
E) $324,800

Question

A company's overhead rate is 60% of direct labor cost.Using the following incomplete accounts,determine the cost of direct materials used:

A) $106,400 
B) $113,120 
C) $30,240 
D) $211,680 
E) $324,800

Quizplus · Accepted Answer

OH = $90,720 (credit from Factory Overhead Account)
DL = $90,720 /.6 = $151,200
Transferred to FG (COGM) = $324,800 (debit from Finished Goods Inventory)
BB Goods in Process + DM + DL + FOH - EB Goods in Process = Trans to FG
$100,800 + DM + $151,200 + $90,720 - $131,040 = $324,800
$211,680 + DM = $324,800
DM = $113,120

A Company's Overhead Rate Is 60% of Direct Labor Cost