The ending inventory of finished goods has a total cost of $13,800 and consists of 1,000 units. If the overhead applied to these goods is $4,534, and the overhead rate is 68% of direct labor, how much direct materials cost was incurred in producing these units?

The ending inventory of finished goods has a total cost of $13,800 and consists of 1,000 units. If the overhead applied to these goods is $4,534, and the overhead rate is 68% of direct labor, how much direct materials cost was incurred in producing these units?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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