In May Direct Labor Was 60% of Conversion Cost

question 165

Multiple Choice

In May direct labor was 60% of conversion cost. If the manufacturing overhead for the month was $54,000 and the direct materials cost was $30,000, the direct labor cost was:

• A) $36,000
• B) $20,000
• C) $81,000
• D) $45,000

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Definitions:

Informal Contract

An oral or written contract that is not under a seal or is not a contract of record. Also called simple contract.

Quasi-Contract

An obligation imposed by the law to avoid injustice, even though no true contract exists between the parties.

Duty to Mitigate Damages

The legal principle requiring a party suffering loss as a result of a breach of contract to take reasonable action to minimize the financial harm.

Breach of Contract

A violation of any of the agreed-upon terms and conditions of a legal contract.