Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated
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Kenmore Fabrication estimated that direct labor cost for the year would be $640,000. The company also estimated that fixed overhead would be $480,000 and variable overhead would be 35 percent of direct labor cost. Kenmore applies its overhead on the basis of direct labor cost. During the year, all fixed overhead costs were exactly as planned ($480,000) and variable overhead was also incurred as expected. There was $30,000 in underapplied overhead.
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How much did Kenmore spend on direct labor cost during the period? Show computations.
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