The following apply to Startford LTD Direct material inventory,begining of the y

ID: 2579865 • Letter: T

Question

The following apply to Startford LTD

Direct material inventory,begining of the year R 5 500

Direct materials inventory, end of the year R 3 000

Direct materials purchased durind the year R 45 000

Work in process inventory, beggining of the year R 9 0000

Manufacturing overhead applied during the year R 20 000

Work in process inventory , end of the year R 14 000

Predetermined overhead rate - 200 per cent of direct labor cost .

1. Calculate the amount of direct materials used during the year

2.Calculate the amount of direct labour cost incurred during the year

1.direct materials used during the year:

direct materials purchased during the year + beginning inventory - closing inventory of the direct materials

=>R 45,000 +R 5,500 - R3000

=>R47,500.

direct materials used during the year = R47,500.

2. DIrect labour cost incurred during the year :

given that overhead rate is200% of direct labour cost.

=>R 20,000 =>200% * direct labour cost

=>R 20,000 / 200% = direct labour cost

=>R10,000 = direct labour cost.

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