Petlyn Pty Ltd applies overhead to completed jobs using a predetermined rate of 60% of direct labour costs.If Job No 22 shows $9,000 of factory overhead applied,how much was the direct labour cost of the job?

Question

Quizplus · Accepted Answer

The predetermined overhead rate is 60% of direct labor costs. If $9,000 is the overhead applied, then $9,000 is 60% of the direct labor cost. To find the direct labor cost, divide $9,000 by 0.60, which equals $15,000.

Petlyn Pty Ltd Applies Overhead to Completed Jobs Using a Predetermined