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    ktdanielson's Avatar
    ktdanielson Posts: 16, Reputation: 1
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    #1

    May 26, 2010, 02:30 PM
    How do I calculate direct labor in job costing?
    If I know what the direct material costs are and what the total costs are, how do I calculate the $ amount of direct labor? I know that the overhead allocation rate is 75% of the direct material and direct labor combined.

    Thanks!
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    May 27, 2010, 02:37 AM

    Er... that's a new one on me. It's not uncommon for problems to have overhead as a percent of labor and make you solve for the labor and overhead -- I've never seen overhead as a percent of combined material and labor.

    But:

    material + labor + .75 (material + labor) = total

    Can you plug in and solve the algebra?
    ktdanielson's Avatar
    ktdanielson Posts: 16, Reputation: 1
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    #3

    May 27, 2010, 05:57 AM

    I have material at $400 and total @2100 but can't get it to compute??
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #4

    May 27, 2010, 03:33 PM

    So 400 + L + .75(400 + L) = 2100

    Are you having trouble setting that up, or solving the algebra? Distribute first, then combine like terms, and then solve for the L.
    ktdanielson's Avatar
    ktdanielson Posts: 16, Reputation: 1
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    #5

    May 27, 2010, 04:13 PM

    Thanks!
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #6

    May 28, 2010, 11:49 PM

    You're welcome. (I guess that means you were having trouble setting it up.)

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