Cabaret Corporation had actual manufacturing overhead costs for the most recent year of $27,500.Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $1.75 per direct labor hour.Direct labor cost is $18 per hour.At the end of the year,Cabaret Corporation found it had overallocated manufacturing overhead by $1,000.
-How many direct labor hours were worked in total during the year?

Question

Quizplus · Accepted Answer

To find the total direct labor hours worked, we first calculate the total allocated manufacturing overhead, which is the actual overhead plus the overallocated amount: $27,500 + $1,000 = $28,500. Since the overhead rate is $1.75 per direct labor hour, we divide the total allocated overhead by the rate: $28,500 / $1.75 = 16,286 direct labor hours.

Cabaret Corporation Had Actual Manufacturing Overhead Costs for the Most