YouAssume the following information pertaining to Smith Company:Prime costs195,000Conversion costs221,000Direct materials used85,000Beginning work in process98,000Ending work in process81,000Manufacturing overhead is calculated to be_______:Question 6Select one:a.$26,000.b.$84,000.c.$306,000.d.$111,000.
Question
YouAssume the following information pertaining to Smith Company:Prime costs195,000Conversion costs221,000Direct materials used85,000Beginning work in process98,000Ending work in process81,000Manufacturing overhead is calculated to be_______:Question 6Select one:a.84,000.c.111,000.
Solution
To calculate the manufacturing overhead, we first need to understand the components of the prime cost and the conversion cost.
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Prime cost is the sum of direct materials and direct labor. Given that the prime cost is 85,000, we can calculate the direct labor as follows:
Direct Labor = Prime Cost - Direct Materials Direct Labor = 85,000 = $110,000
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Conversion cost is the sum of direct labor and manufacturing overhead. Now that we have the direct labor, we can calculate the manufacturing overhead as follows:
Manufacturing Overhead = Conversion Cost - Direct Labor Manufacturing Overhead = 110,000 = $111,000
So, the manufacturing overhead is 111,000.
Similar Questions
Assume the following information pertaining to Smith Company:Manufacturing overhead is calculated to be_______:Question 6Select one:a.$26,000.b.$84,000.c.$306,000.d.$111,000.
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