During the month of May, direct labor cost totaled $10,000 and direct labor cost was 40% of prime cost

Management Sep 05, 2020

During the month of May, direct labor cost totaled $10,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during May were $86,000, the manufacturing overhead was?

Expert Solution

Computation of Manufacturing Overhead:

Manufacturing Overhead = Manufacturing Cost - Prime Cost

Here,

Manufacturing Cost = 86000

Prime Cost = $10,000/40% = $25,000

Manufacturing Overhead = $86,000-$25,000 = $61,000

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