Starlight Company uses a job costing system. Starlight Company uses estimated direct labour hours of 180,000 and estimated manufacturing overhead costs of $360,000 in establishing its predetermined manufacturing overhead rate. Actual results for the year showed:
Actual manufacturing overhead cost$\quad $$\quad $ $353,000
Allocated manufacturing overhead cost $\quad $340,000
The number of direct labour hours worked during the period was

Question

Starlight Company uses a job costing system. Starlight Company uses estimated direct labour hours of 180,000 and estimated manufacturing overhead costs of $360,000 in establishing its predetermined manufacturing overhead rate. Actual results for the year showed: 
Actual manufacturing overhead cost$\quad $$\quad $ $353,000
Allocated manufacturing overhead cost $\quad $340,000
The number of direct labour hours worked during the period was

Quizplus · Accepted Answer

The predetermined manufacturing overhead rate is calculated as estimated manufacturing overhead costs divided by estimated direct labor hours, which is $360,000 / 180,000 hours = $2 per direct labor hour. The allocated manufacturing overhead cost is $340,000, which at the rate of $2 per direct labor hour, suggests that 170,000 direct labor hours were worked (since $340,000 / $2 per hour = 170,000 hours).

Starlight Company Uses a Job Costing System \quad \quad

Starlight Company Uses a Job Costing System $\quad$ $\quad$