# week 7 EX3-28 - (Round your answer to the nearest dollar...

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Exercise 3-28 Cost Relationships; Normal Costing System (LO 2, 6) Herget, Inc. employs a normal costing system. The following information pertains to the year just ended. Total manufacturing costs were \$2,500,000. Cost of goods manufactured was \$2,250,000. Applied manufacturing overhead was 39 percent of total manufacturing costs. Manufacturing overhead was applied to production at a rate of 75 percent of direct-labor cost. Work-in-process inventory on January 1 was 26 percent of work-in-process inventory on December 31. Requirement 1: Compute Herget's total direct-labor cost for the year. (Round your answer to the nearest dollar amount. Omit the "\$" sign in your response.) Direct-labor cost \$ 1,300,000 Feedback:

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Applied manufacturing overhead = total manufacturing costs × 39% = \$2,500,000 × 39% = \$975,000 Direct-labor cost = applied manufacturing overhead ÷ 75% = \$975,000 ÷ 0.75 = \$1,300,000 Requirement 2: Calculate the total cost of direct material used during the year.

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