Regan Company operates its factory on a two - shift basis and pays a late - shift differential o tial of 15 Regan also pays a premium of 50 % for overtime work . Because Regan manufactures only for stock , the cost system provides for uniform direct - labor hourly charges for production done without regard to shift worked or work done on an overtime basis . Overtime and late - shit differentials are included in Regan's factory overhead application rate . The May payroll for production workers is as follows Wages at base direct - labor rate $325. 000 Shift differentials 25000 Overtime premiums 10.000 $360 000 For the month of May , what is the amount of the direct labor cost that Regan should debit to the Work - in - process inventory account ? D ) $325. 000 D ) 8335. 000 $350.000 360.000