Warren Company Applies Overhead Based on Direct Labor Cost

question 61

Multiple Choice

Warren Company applies overhead based on direct labor cost.Warren Company estimated that it would incur $180,000 in manufacturing overhead costs and $120,000 of direct labor costs during the current year.Actual manufacturing overhead cost totaled $150,000 and actual direct labor costs totaled $110,000 during the current year.If total manufacturing costs were $320,000,what amount of direct materials was used during the year?

• A) $60,000
• B) $30,000
• C) $45,000
• D) None of these answers are correct.