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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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  1. 14 March, 15:00
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    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
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