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    jamiehammock's Avatar
    jamiehammock Posts: 6, Reputation: 1
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    #1

    Jul 20, 2012, 10:22 AM
    The amount of overhead debited to work in process inventory should be
    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's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Jul 20, 2012, 02:49 PM
    surely you have answered your own question, simple mathematics, determine the value of direct labour, etc, etc
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    jamiehammock Posts: 6, Reputation: 1
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    #3

    Jul 20, 2012, 03:42 PM
    Quote Originally Posted by paraclete View Post
    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
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    paraclete Posts: 2,706, Reputation: 173
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    #4

    Jul 20, 2012, 03:48 PM
    Quote Originally Posted by jamiehammock View Post
    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
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    jamiehammock Posts: 6, Reputation: 1
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    #5

    Jul 20, 2012, 04:05 PM
    Quote Originally Posted by paraclete View Post
    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?
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    paraclete Posts: 2,706, Reputation: 173
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    #6

    Jul 20, 2012, 04:17 PM
    Quote Originally Posted by jamiehammock View Post
    So I take 700000-100000=600000x .80?
    Sounds like the way to go.
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