Abburi Company's manufacturing overhead is 35% of its total conversation costs. If direct labor is $83,200...
Abburi Company's manufacturing overhead is 35% of its total conversation costs. If direct labor is $83,200 and if direct materials are $29,700, the manufacturing overhead is:
A) $44,800
B) $154,514
C) $15,992
D) $60,792
Homework Answers
Answer A:$44,800
Explanation
Manufacturing overhead = 0.35 * Conversion cost
Direct labor = $83,200
Conversion cost = Direct labor + Manufacturing overhead
Conversion cost = $83,200 + Manufacturing overhead
Conversion cost = $83,200 + 0.35 * Conversion cost
0.65 * Conversion cost = $83,200
Conversion cost = $83,200 / 0.65
Conversion cost = $128,000
Manufacturing overhead = 0.35 * Conversion cost
Manufacturing overhead = 0.35 *$128,000
Manufacturing overhead = $44,800
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