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Sargent Corporation applies overhead cost to jobs on the basis of 80% of direct labor cost. If Job 210 shows $17,920 of manufacturing overhead cost applied, how much was the direct labor cost on the job

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Answer:

direct labor costs= $22,400

Explanation:

Giving the following information:

Sargent Corporation applies overhead costs to jobs based on 80% of direct labor cost.

Job 210 shows $17,920 of manufacturing overhead cost applied.

To calculate the direct labor cost for Job 210, we need to use the following formula:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

17,920= 0.8* direct labor costs

direct labor costs= 17,920/0.8

direct labor costs= $22,400

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