Warren Company applies overhead based on direct labor cost.Warren Company estimated that it would incur $180,000 in manufacturing overhead costs and $120,000 of direct labor costs during the current year.Actual manufacturing overhead cost totaled $150,000 and actual direct labor costs totaled $110,000 during the current year.If total manufacturing costs were $320,000,what amount of direct materials was used during the year?
A) $60,000
B) $30,000
C) $45,000
D) None of these.

Question

Quizplus · Accepted Answer

Total manufacturing costs = Direct materials used + Direct labor + Actual manufacturing overhead costs
Direct materials used = Total manufacturing costs - (Direct labor + Actual manufacturing overhead costs)
Direct materials used = $320,000 - ($110,000 + $150,000)= $60,000

Warren Company Applies Overhead Based on Direct Labor Cost