Question

The following information is available for Rodriguez Industries: Direct labor $ 60,000 Total current manufacturing costs 300,000 Manufacturing overhead is applied to production at 200 percent of direct labor cost. Determine the amount of direct materials used in production.

Answer 1

Based on the various costs of production, we can calculate that the direct materials used was $120,000

Manufacturing overhead amount

Manufacturing overhead is charged at 200% of labor. The cost is therefore:

= Direct labor x 200%

= 60,000 x 200%

= $120,000

Direct materials

Total manufacturing cost = Direct labor + Direct materials + Overhead

300,000 = 60,000 + Direct materials + 120,000

Direct materials = 300,000 - 60,000 - 180,000

= $120,000

In conclusion, direct material is $120,000.

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