Question

At the beginning of the year, manufacturing overhead for the year was estimated to be $802,125. At the end of the year, actual direct labor-hours for the year were 36,270 hours, the actual manufacturing overhead for the year was $775,000, and manufacturing overhead for the year was overapplied by $41,075. 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: (Round your intermediate calculations to 2 decimal places.)

Answer 1

35,650 hours

Step-by-step explanation:

The calculation of direct labor hour is shown below:-

Applied Overheads = actual overhead +Over-applied overheads

= $775,000 + $41,075

= $816,075

Predetermined overhead rate = Applied overhead ÷ Labor hours

= 816,075 ÷ 36,270

= $22.50

Direct labor Hours = Estimated Overhead ÷ Predetermined overhead rate

= $802,125 ÷ $22.50

= 35,650 hours