Ring Company designs and builds jewelry. During June it had applied overhead of $120,000. Overhead is applied at the rate of 75% of direct labor cost. Direct labor wages average $20 per hour. How many direct labor hours did Ring Company have for the month of June?

Question

Business

Osvaldo Berg

14 March, 12:09

Ring Company designs and builds jewelry. During June it had applied overhead of $120,000. Overhead is applied at the rate of 75% of direct labor cost. Direct labor wages average $20 per hour. How many direct labor hours did Ring Company have for the month of June?

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Answers (1)

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Kamila Burke · Answer 1

4.500

Explanation:

According with the information say that the $120.000 correspond to overhead to the rate of 75% of direct labor force, so you have to calculate the portion that is directed to the direct labor cost:

Direct labor cost: $120.000 * 75%

Direct labor cost: $ 90.000

Now you know that the average wages per hour of the direct labor force is $20. Now you have to divide the direct labor cost by the average salary per hour to calculate the number of hours worked in June.

Number of hours = $ 90.000/$20

Number of hours = 4.500