Forsyth,Inc.uses estimated direct labor hours of 240,000 and estimated manufacturing overhead costs of $1,150,000 in establishing its predetermined overhead allocation rate for the year.Actual results showed the following: $$\begin{array} { | l | l | }
\hline \text { Actual manufacturing overhead } & \$ 800,000 \
\hline \text { Allocated manufacturing overhead } & \$ 900,000 \
\hline
\end{array}$$
The number of direct labor hours worked during the period was ________.(Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number.)

Question

Forsyth,Inc.uses estimated direct labor hours of 240,000 and estimated manufacturing overhead costs of $1,150,000 in establishing its predetermined overhead allocation rate for the year.Actual results showed the following: $$\begin{array} { | l | l | } 
\hline \text { Actual manufacturing overhead } & \$ 800,000 \
\hline \text { Allocated manufacturing overhead } & \$ 900,000 \
\hline
\end{array}$$ 
The number of direct labor hours worked during the period was ________.(Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number.)

Quizplus · Accepted Answer

The actual manufacturing overhead is $800,000 and the allocated manufacturing overhead is $900,000. This means that the overhead was underallocated by $100,000. The predetermined overhead allocation rate is $1,150,000 / 240,000 hours = $4.79 per hour. The actual direct labor hours worked during the period can be calculated as $100,000 / $4.79 per hour = 20,879 hours. The total direct labor hours worked during the period is 240,000 hours + 20,879 hours = 260,879 hours. Rounding this to the nearest whole number gives 260,880 hours.

Forsyth,Inc The Number of Direct Labor Hours Worked During the Period