Farber Corporation uses a job-order costing system. The information below is rom

Question

Farber Corporation uses a job-order costing system. The information below is rom the inancial recards of the company for lot yeari is from the financial for last year Cost of goods manufectured Predetermined overhead rate $2,803,200 80% of direct labor cost Applied overhead was 3 % of total manufacturing costs. The work in Process inventory at January 1 was 75% of the work n Process entory at December 31, Farber Corporation's total direct labor cost was: O $861,000 O $876,000o O $1057500 $1,095,000

Explanation / Answer

Applied overhead = 2920000*.30= 876000

Predetermined overhead rate: overhead applies= 80% of direct labor cost

876000=.80 *direct labor cost

Direct labor cost = 876000/.80

         = $ 1095000

correct option is"D"

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