View Full Version : The amount of overhead debited to work in process inventory should be
jamiehammock
Jul 20, 2012, 10:22 AM
The predetermined overhead rate is 80% of direct labor cost. During he month, $700,000 of factory labor costs were incurred of which $100,000 was indirect labor. The amount of overhead debited to work in process inventory should be
paraclete
Jul 20, 2012, 02:49 PM
surely you have answered your own question, simple mathematics, determine the value of direct labour, etc, etc
jamiehammock
Jul 20, 2012, 03:42 PM
surely you have answered your own question, simple mathematics, determine the value of direct labour, etc, etc. Doesn't help. I'm struggling with the question I don't know how to solve it
paraclete
Jul 20, 2012, 03:48 PM
the predetermined overhead rate is 80% of direct labor cost. During he month, $700,000 of factory labor costs were incurred of which $100,000 was indirect labor The amount of overhead debited to work in process inventory should be
The answer to the problem lies in basic comprehension and logic
if you are given the value of indirect labour and the value of factory labour costs then what remains must be direct labour. The overhead rate is applied to direct labour so the amount debited to work in progress is direct labour multiplied by the overhead rate
jamiehammock
Jul 20, 2012, 04:05 PM
The answer to the problem lies in basic comprehension and logic
if you are given the value of indirect labour and the value of factory labour costs then what remains must be direct labour. The overhead rate is applied to direct labour so the amount debited to work in progress is direct labour multiplied by the overhead rate
So I take 700000-100000=600000x .80?
paraclete
Jul 20, 2012, 04:17 PM
So I take 700000-100000=600000x .80?
Sounds like the way to go.