8. Wilturner Company incurs $87,000 of labor related directly to the product in

Question

8. Wilturner Company incurs $87,000 of labor related directly to the product in the Assembly Department, $36,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $23,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:

A. $123,000 and $23,000.

B. $87,000 and $59,000.

C. $110,000 and $36,000.

D. $146,000 and $0.

E. $87,000 and $23,000.

PLEASE ADD EXPLANATION

Explanation / Answer

Amount of direct labor = 87000+36000 = 123000 Factory overhead = 23000 Option A is correct The labor cost directly related to the production of a product is treated as a direct labor cost

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