Williams Company's direct labor cost is 25% of its conversion cost. If the manufacturing overhead for the last period was $45,000 and the direct materials cost was $25,000, the direct labor cost wa
Direct labor cost = 25% x (45,000 + 25,000) = $18,750
To find the direct labor cost, we need to know the conversion cost. The conversion cost is the total cost of converting raw materials into finished goods and includes both direct labor and manufacturing overhead.
According to the given information, the direct labor cost is 25% of the conversion cost. Let's assume the conversion cost as "C".
So, the direct labor cost can be calculated as follows:
Direct Labor Cost = 25% of Conversion Cost
Direct Labor Cost = 0.25 * C
To find the conversion cost, we can use the formula:
Conversion Cost = Direct Labor Cost + Manufacturing Overhead
Given that the manufacturing overhead for the last period was $45,000, we can substitute the values to find the conversion cost:
$45,000 = Direct Labor Cost + $45,000
Now, let's substitute the direct labor cost from the first equation into this equation:
$45,000 = 0.25 * C + $45,000
Now, let's solve for C:
0.25 * C = $45,000
C = $45,000 / 0.25
C = $180,000
Now that we know the conversion cost, we can substitute it back into the equation for direct labor cost:
Direct Labor Cost = 0.25 * C
Direct Labor Cost = 0.25 * $180,000
Direct Labor Cost = $45,000
Therefore, the direct labor cost for Williams Company is $45,000.
To find the direct labor cost, we need to know the conversion cost. The conversion cost includes both direct labor and manufacturing overhead.
Given that the direct labor cost is 25% of the conversion cost, we can calculate the conversion cost using the following equation:
Direct labor cost = 25% × Conversion cost
We are given the manufacturing overhead as $45,000 and the direct materials cost as $25,000. To find the conversion cost, we can subtract the manufacturing overhead and direct materials cost from the total cost:
Conversion cost = Total cost - Manufacturing overhead - Direct materials cost
Since we don't have the total cost, we cannot calculate the conversion cost or the direct labor cost accurately without that information.