John has applied overhead of $80,000 and actual overhead of $70,600 for the month of November.He applies overhead based on direct labor hours, and that amounts to 10,000 hours for the month of November.The overhead for the year was estimated to be $1,120,000.How many direct labor hours were estimated for the year?
A) 225,200
B) 140,000
C) 500,000
D) 150,000
E) 650,700

Question

Quizplus · Accepted Answer

Predetermined Overhead Rate = Estimated Annual Overhead / Estimated Annual Activity Level = $80,000 / 10,000 direct labor hours = $8 per direct labor hour
 
Direct labor hours = $1,120,000 / $8 per direct labor hour = 140,000 hours

John Has Applied Overhead of $80,000 and Actual Overhead of $70,600