A company's overhead rate is 60% of direct labor cost. Using the following incomplete accounts, determine the cost of direct materials used. 106,400.

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. 106,400.

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

Quizplus · Accepted Answer

Direct Labor × FOH Rate = FOH Applied
Direct Labor × .60 = $90,720
Direct Labor = $90,720/.60 = $151,200
Beg. Bal. + DM + DL + OH − Transfer to FG = End. Bal.
$100,800 + DM + $151,200 + $90,720 − $324,800 = $131,040; DM = $113,120
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A Company's Overhead Rate Is 60% of Direct Labor Cost