A department has a budgeted monthly manufacturing overhead cost of $160,000 plus $16 per direct labor hour. If a flexible budget reflects $388,000 for total manufacturing overhead cost for the month, the actual direct labor hours would be:

Question

Quizplus · Accepted Answer

To find the actual direct labor hours, we need to use the formula for the flexible budget:

Total Manufacturing Overhead Cost = Fixed Manufacturing Overhead Cost + (Variable Manufacturing Overhead Rate x Actual Direct Labor Hours)

We know that the budgeted monthly manufacturing overhead cost is $160,000, and the variable manufacturing overhead rate is $16 per direct labor hour.

So, we can set up the formula like this:

$388,000 = $160,000 + ($16 x actual direct labor hours)

$228,000 = $16 x actual direct labor hours

Actual direct labor hours = $228,000 / $16

Actual direct labor hours = 14,250

Therefore, the answer is C) 14,250.

A Department Has a Budgeted Monthly Manufacturing Overhead Cost of $160,000