Question

Morgan corporation uses estimated direct labor hours of 200 comma 700 and estimated manufacturing overhead costs of $ 920 comma 500 in establishing manufacturing overhead rates. actual manufacturing overhead was $ 970 comma 100​, and allocated manufacturing overhead was $ 1 comma 013 comma 000. what was the number of actual direct hours​ worked? (round intermediary calculations to the nearest cent and the final answer to the nearest​ dollar.)

Answer 1

Given:

Estimated direct labor hours of 200,700 hrs

Estimated manufacturing overhead costs of $920,500

Actual manufacturing overhead costs of $970,100

Allocated manufacturing overhead is $1,013,000

Find the number of actual direct hours worked in Morgan Corporation?

Determine first the overhead allocation rate by dividing the estimated overhead costs to the estimated direct labor hours: $920,500/200,700 hrs = $4.586 à round to nearest cent $4.60

Next is divide the allocated manufacturing overhead to the overhead allocation rate: $1,013,000/$4.60 = 220,217.39 à round the answer to 220,217

The actual number of direct hours worked is 220,217 hours.