At the beginning of the year, manufacturing overhead for the year was estimated to be $994,125. At the end of the year, actual direct labor hours for the year were 36,370 hours, the actual manufacturing overhead for the year was $940,000, and the manufacturing overhead for the year was overapplied by $60,175. 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: a. 34,182 direct labor hours. b. 36,150 direct labor hours. c. 36,370 direct labor hours. d. 31,994 direct labor hours.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 1EB: Green Bay Cheese Company estimates its overhead to be $375,000. It expects to have 125,000 direct...
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At the beginning of the year, manufacturing
overhead for the year was estimated to be
$994,125. At the end of the year, actual direct labor
hours for the year were 36,370 hours, the actual
manufacturing overhead for the year was
$940,000, and the manufacturing overhead for the
year was overapplied by $60,175.
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:
a. 34,182 direct labor hours.
b. 36,150 direct labor hours.
c. 36,370 direct labor hours.
d. 31,994 direct labor hours.
Transcribed Image Text:At the beginning of the year, manufacturing overhead for the year was estimated to be $994,125. At the end of the year, actual direct labor hours for the year were 36,370 hours, the actual manufacturing overhead for the year was $940,000, and the manufacturing overhead for the year was overapplied by $60,175. 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: a. 34,182 direct labor hours. b. 36,150 direct labor hours. c. 36,370 direct labor hours. d. 31,994 direct labor hours.
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