Question 9 (10 points) Ecco Company manufactures quality gentlemen\'s clothing.

Question

Question 9 (10 points) Ecco Company manufactures quality gentlemen's clothing. The following selected financial information for the fiscal year 2018 is provided: Item Amount $100,000 65,000 40,000 10,000 30,000 15,000 10,000 Sales Cost of Goods Manufactured Direct Material Purchased Factory Overhead Work in Process-January 1 Work in Process December 31 Direct Material December 31 Finished Goods Inventory - 60,000 December 31 Net Income 15,000 30,000 55,000 Direct Materials used Cost of Goods Sold Use this information to determine the dollar amount of Ecco's Direct Labor Costs for the fiscal year 2018.

Explanation / Answer

Calculate direct labour cost for 2018 :

Total manufacturing cost = Ending work in process+Cost of goods manufactured-Beginning work in process

= 15000+65000-30000

Total manufacturing cost = 50000

Direct labour = Total manufacturing cost-Direct material used-Factory overhead

= 50000-30000-10000

Direct labour = 10000

So answer is $10000

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