Fireox Company's selected cost data for 2015 are shown below: Assuming manufacturing overhead costs of $27,850, what is the amount of direct labor incurred by Fireox Company in 2015?
A)$63,120
B)$190,430
C)$57,580
D)$79,690

Question

Fireox Company's selected cost data for 2015 are shown below:  Assuming manufacturing overhead costs of $27,850, what is the amount of direct labor incurred by Fireox Company in 2015?
A)$63,120 
B)$190,430 
C)$57,580 
D)$79,690

Quizplus · Accepted Answer

Direct labor cost = Total manufacturing costs - (Raw materials used + Indirect manufacturing costs)
= $202,460 - ($91,030 + $27,850) = $83,580 - $27,850 = $55,730
Therefore, the amount of direct labor incurred by Fireox Company in 2015 is $57,580 (closest option is C).

Fireox Company's Selected Cost Data for 2015 Are Shown Below