Forsyth Company uses estimated direct labor hours of 150,000 and estimated manufacturing overhead costs of $337,500 in establishing its 2012 predetermined manufacturing overhead rate. Actual results showed:
$\begin{array}{|l|r|}
\hline\text { Actual manufacturing overhead } & \$ 346,500 \
\hline \text { Allocated manufacturing overhead } & \$ 343,800 \
\hline
\end{array}$
The number of direct labor hours worked during the period was:

Question

Forsyth Company uses estimated direct labor hours of 150,000 and estimated manufacturing overhead costs of $337,500 in establishing its 2012 predetermined manufacturing overhead rate. Actual results showed:
$\begin{array}{|l|r|}
\hline\text { Actual manufacturing overhead } & \$ 346,500 \
\hline \text { Allocated manufacturing overhead } & \$ 343,800 \
\hline
\end{array}$ 
The number of direct labor hours worked during the period was:

Quizplus · Accepted Answer

The predetermined overhead rate is calculated as estimated overhead costs divided by estimated direct labor hours, which is $337,500 / 150,000 = $2.25 per hour. The allocated overhead is $343,800, so the actual direct labor hours worked is $343,800 / $2.25 = 152,800 hours.

Forsyth Company Uses Estimated Direct Labor Hours of 150,000 and Estimated