The following information is available for Rodriguez Industries:
1. Direct labor $ 86,000
2. Total current manufacturing costs 381,000
Manufacturing overhead is applied to production at 130 percent of direct labor cost.
a. Determine the amount of direct materials used in production.

$183,200

Explanation:

Given that,

Direct labor = $86,000

Total current manufacturing costs = $381,000

Manufacturing overhead is applied to production:

= 130% of direct labor cost

= 1.30 × $86,000

= $111,800

Total manufacturing costs = Direct material + Direct labor + Manufacturing overhead.

$381,000 = Direct material + $86,000 + $111,800

Direct material = $381,000 - $86,000 - $111,800

                         = $183,200

Therefore, the amount of direct materials used in production is $183,200.

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