accounting 2

During the month of September, direct labor cost totaled $11,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during September were $73,000, the manufacturing overhead was:
	$16,500
	$27,500
	$62,000
→	$45,500


Givens:

Direct labor cost = $11,000
Direct labor cost = 0.40 × Prime cost
Total manufacturing cost = $73,000

Direct labor cost = 0.40 × Prime cost
Prime cost = Direct labor cost ÷ 0.40
Prime cost = $11,000 ÷ 0.40 = $27,500

Total manufacturing cost = Prime cost + Manufacturing overhead cost
$73,000 = $27,500 + Manufacturing overhead cost
Manufacturing overhead cost = $45,500