Stephenson Company's Computer System Recently Crashed,erasing Much of the Company's

question 14

Multiple Choice

Stephenson Company's computer system recently crashed,erasing much of the Company's financial data.The following accounting information was discovered soon afterwards on the CFO's backup computer disk.
Direct labor cost incurred during the period amounted to 1.5 times the factory overhead.The CFO of Stephenson Company has asked you to recalculate the following accounts and report to him by week's end.What should be the amount of direct materials used?

• A)$8,500.
• B)$7,000.
• C)$12,500.
• D)$2,000. $8,500 = $35,500 + $73,500 + X + $49,000 - $126,000 = $40,500; Where $73,500 = (1.5 x Overhead);X = $8,500

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