In August Direct Labor Was 60% of Conversion Cost

question 104

Multiple Choice

In August direct labor was 60% of conversion cost. If the manufacturing overhead for the month was $54,000 and the direct materials cost was $34,000, the direct labor cost was:

• A) $36,000
• B) $22,667
• C) $51,000
• D) $81,000

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Definitions:

Cash Payments Journal

A special journal used in accounting to record all transactions that involve payments made by a company.

Supplies

Supplies refer to items consumed or used in the day-to-day operations of a business, often not directly linked to the products being sold.

Advance Payment

Advance Payment is the money paid before it is due or before the goods or services are received, often used to secure orders or as a guarantee against non-payment.

Subsidiary Ledger

A secondary ledger that provides detailed information to support accounts listed in the general ledger, such as customer or vendor details.