Tyare Corporation had the following inventory balances at the beginning and end
ID: 2334736 • Letter: T
Question
Tyare Corporation had the following inventory balances at the beginning and end of May: May 30 $26,000 $31,000 Finished Goods $75,500 $67,000 Work in Process $14,000 $16,567 May 1 Raw materials During May, $59,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 310 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,100 of direct materials cost. The Corporation incurred $42,150 of actual manufacturing overhead cost during the month and applied $39,900 in manufacturing overhead cost. The actual direct labor-hours worked during May totaled:Explanation / Answer
SOLUTION
Actual direct labor hours worked during May = 3,325 hours
The overhead allocation rate is $12 per hour
The overhead applied to production = $39,900
Overhead applied = Allocation rate * Actual labour hours
$39,900 = $12 * Actual labour hours
Actual labour hours = $39,900 / $12
Actual labour hours = 3,325 hours
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