Job 31 has a direct materials cost of $350 and a total manufacturing cost of $1,

Question

Job 31 has a direct materials cost of $350 and a total manufacturing cost of $1,100. Overhead is applied to jobs at a rate of 200 percent of direct labor cost.

     Use the relationships among total manufacturing costs, conversion cost, and prime cost to determine the following costs for job 31:

a: conversion costs

b: Direct Labor Costs

c: Manufacturing Overhead Costs

D: Prime Costs

     Use the relationships among total manufacturing costs, conversion cost, and prime cost to determine the following costs for job 31:

a: conversion costs

b: Direct Labor Costs

c: Manufacturing Overhead Costs

D: Prime Costs

Explanation / Answer

a.

total manufacturing cost =direct material + Conversion costs

Conversion costs = 1100-350= $750

b

Conversion costs = Direct labor + Manufacturing overhead

750 = Direct labor + 200%*Direct labor

Direct labor = $250

c: Manufacturing Overhead Costs = 2*250 = $500

D: Prime Costs = Direct labor + direct material = 250+ 350 = $600

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