At the beginning of the year, manufacturing overhead for the year was estimated
ID: 2422067 • Letter: A
Question
At the beginning of the year, manufacturing overhead for the year was estimated to be $477,590. At the end of the year, actual direct labor-hours for the year were 29,000 hours, the actual manufacturing overhead for the year was $472,590, and manufacturing overhead for the year was overapplied by $110. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:
29,300 direct labor-hours
28,987 direct labor-hours
28,993 direct labor-hours
29,000 direct labor-hours
Explanation / Answer
Estimated manufacturing overhead for the year = $477,590
actual direct labor hours = 29000 hours
Actual manufacturing overhead for the year = $472,590
manufacturing overhead for the year was overapplied by $110
the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been
rate = 472590/29000 = 16.30
beg = $477590 / 16.30 = 29300
ANSWER = A) 29300 DIRECT LABOR HOURS
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