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

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, begining of the year R 9 000

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

Explanation / Answer

Ans: Amount of direct materials used during the year

           = Direct material inventory,begining + Direct materials purchased- Direct materials inventory, end

            = 5500+45000-3000= 47500

      Amount of direct labour cost incurred during the year

            =Manufacturing overhead applied during the year/Predetermined overhead rate

             = 10000

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