Problem 7-50 (Static) Estimate Direct Labor Costs from Overhead Data (LO 7-2) Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed overhead would be $480,000 and variable overhead would be 35 percent of direct labor cost. Kenmore applies its overhead on the basis of direct labor cost. During the year, all fixed overhead costs were exactly as planned ($480,000) and variable overhead was also incurred as expected. There was $30,000 in underapplied overhead. Required: How much did Kenmore spend on direct labor cost during the period? Actual direct labor cost $ 640,000
Problem 7-50 (Static) Estimate Direct Labor Costs from Overhead Data (LO 7-2) Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed overhead would be $480,000 and variable overhead would be 35 percent of direct labor cost. Kenmore applies its overhead on the basis of direct labor cost. During the year, all fixed overhead costs were exactly as planned ($480,000) and variable overhead was also incurred as expected. There was $30,000 in underapplied overhead. Required: How much did Kenmore spend on direct labor cost during the period? Actual direct labor cost $ 640,000
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Problem 7-50 (Static) Estimate Direct Labor Costs from Overhead Data (LO 7-2)
Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed
overhead would be $480,000 and variable overhead would be 35 percent of direct labor cost. Kenmore applies its overhead on the
basis of direct labor cost. During the year, all fixed overhead costs were exactly as planned ($480,000) and variable overhead was also
incurred as expected. There was $30,000 in underapplied overhead.
Required:
How much did Kenmore spend on direct labor cost during the period?
Actual direct labor cost
$ 640,000
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