Asked by Justene Hirsig on Jun 13, 2024
Verified
Finished goods inventory is $190,000.If overhead applied to these goods is $72,000,and the overhead rate is 120% of direct labor,how much direct materials cost was incurred in producing the inventory?
A) $31,600.
B) $58,000.
C) $56,000.
D) $60,000.
E) $86,400.
Direct Materials Cost
The cost of raw materials that can be directly traced to the production of goods, excluding indirect materials like maintenance supplies.
Finished Goods Inventory
Finished products awaiting sale but still not purchased.
Overhead Rate
The ratio used to allocate indirect costs to products or services, based on a specific measure such as labor hours or machine hours.
- Comprehend the influence of direct and indirect materials, as well as labor, on the determination of product costs.
Verified Answer
Learning Objectives
- Comprehend the influence of direct and indirect materials, as well as labor, on the determination of product costs.
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