Finished goods inventory is $198,000. If overhead applied to these goods is $78,

Question

Finished goods inventory is $198,000. If overhead applied to these goods is $78,000, and the overhead rate is 120% of direct labor, how much direct materials cost was incurred in producing the inventory? (Round your intermediate calculations and final answer to nearest whole dollar.)

Finished goods inventory is $198,000. If overhead applied to these goods is $78,000, and the overhead rate is 120% of direct labor, how much direct materials cost was incurred in producing the inventory? (Round your intermediate calculations and final answer to nearest whole dollar.)

Explanation / Answer

direct materials cost was incurred in producing the inventory=Finished goods inventory is $198,000-overhead applied to these goods is $78,000-direct labor(78,000*100/120) $65,000=$55,000.

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