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20 June, 12:25

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.)

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  1. 20 June, 12:32
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    35,650 hours

    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
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