For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied in the amount of $6,000 for the year. If the predetermined overhead rate was $8.00 per direct labour hour, how many hours were worked during the year?

Question

Quizplus · Accepted Answer

The predetermined overhead rate is $8.00 per direct labor hour. The overapplied overhead is $6,000. So, the actual overhead cost is $150,000 - $6,000 = $144,000. The number of hours worked during the year is $144,000 / $8.00 = 18,000 hours.

For the Current Year, Paxman Company Incurred $150,000 in Actual