Davie, Inc. used estimated direct labor hours of 245,000 and estimated manufacturing overhead costs of $1,000,000 in establishing its predetermined overhead allocation rate for the year. Actual results showed the following: $$\begin{array} { | l | l | }
\hline \text { Actual manufacturing overhead } & \$ 700,000 \
\hline \text { Allocated manufacturing overhead } & \$ 900,000 \
\hline
\end{array}$$ What was the number of direct labor hours worked during the year? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

Question

Davie, Inc. used estimated direct labor hours of 245,000 and estimated manufacturing overhead costs of $1,000,000 in establishing its predetermined overhead allocation rate for the year. Actual results showed the following: $$\begin{array} { | l | l | } 
\hline \text { Actual manufacturing overhead } & \$ 700,000 \
\hline \text { Allocated manufacturing overhead } & \$ 900,000 \
\hline
\end{array}$$ What was the number of direct labor hours worked during the year? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

Quizplus · Accepted Answer

The predetermined overhead allocation rate is calculated as estimated manufacturing overhead costs divided by estimated direct labor hours, which is $1,000,000 / 245,000 hours = $4.08 per hour. The allocated manufacturing overhead is $900,000, which, at the rate of $4.08 per hour, corresponds to $900,000 / $4.08 per hour = 220,588 hours (rounded to the nearest whole number).

Davie, Inc What Was the Number of Direct Labor Hours Worked During