Dowan Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.Last year Dowan Company incurred $156,600 in actual manufacturing overhead cost.The Manufacturing Overhead account showed that manufacturing overhead was underapplied by $12,600 for the year.If the predetermined overhead rate is $6.00 per direct labor-hour,how many hours did the company work during the year?
A)26,000 hours
B)24,000 hours
C)28,200 hours
D)25,000 hours

Question

Quizplus · Accepted Answer

Underapplied manufacturing overhead = Actual manufacturing overhead - Manufacturing overhead applied
Manufacturing overhead applied = Actual manufacturing overhead - Underapplied manufacturing overhead
= $156,600 - $12,600
= $144,000
Manufacturing overhead applied = Predetermined overhead rate F1F1F1S1F1F1F10 Actual direct labor-hours
Actual direct labor-hours = Manufacturing overhead applied F1F1F1S1F1F1F10 Predetermined overhead rate
= $144,000 F1F1F1S1F1F1F10 $6.00 per direct labor-hour
= 24,000 direct labor-hours

Dowan Company Uses a Predetermined Overhead Rate Based on Direct