Question

The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?A. $3,750
B. $2,000
C. $4,000
D. $6,000
E. $9,000

Answer 1

Answer:

direct material = $2,000

so correct answer is B. $2,000

Explanation:

given data

total cost = $9,000

consists = 600 units

overhead apply = $3,000

overhead rate = 75% of direct labor

solution

we get here Direct Labor that is

Direct Labor = $\frac{3000}{0.75}$

Direct Labor = $4000

and we apply here Total Cost that is

Total Cost = direct material + overhead  + Direct Labor   ..........1

put here value

$9,000  = direct material + $3,000 + $4,000

solve it we get

direct material = $2,000

so correct answer is B. $2,000