[Kathy Patrick]

Need to figure factory overhead using direct labor cost method, direct labor hours method, machine hours method.

Info:
Direct labor cost - $432,000
Direct labor hours - 90,000
Machine hours - 120,000

Manufacturing costs:
Direct materials - $180,000
Direct labor - 540,000
Indirect labor - 60,000
Electric Power - 28,000
Payroll taqxes - 12,600
Machine maintenance and repair - 9,200
Factory supplies - 6,000
Factory heat and light - 4,000
Depreciation, taxes and insurance:
Factory buildings - 100,000
Machinery - 320,200
Total $1,260,000
1. Direct Labor costs
Took 1,260,000 and subtracted direct materials and direct labor to come up with $540,000 factory overhead. IS THIS CORRECT TO FIGURE THE FACTORY OVERHEAD? Took 540,000 direct labor divided by 540,000 factory overhead for 1%. IS THIS CORRECT? SHOULD I USE THE DIRECT LABOR COST OF $432,000 INSTEAD?