Question

During May, $60,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labor-hour, and it paid its direct labor workers $15 per hour. A total of 330 hours of direct labor time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,200 of direct materials cost. The Corporation incurred $42,450 of actual manufacturing overhead cost during the month and applied $40,500 in manufacturing overhead cost. The direct materials cost in the May 1 Work in Process inventory account totaled:

Answer 1

Answer:

3,375 direct labor hours

Explanation:

The computation of the actual direct labor hours worked is shown below:

Actual direct labor worked is

= Manufacturing overhead cost ÷ Predetermined overhead rate

= $40,500 ÷ $12

= 3,375 direct labor hours

By dividing the manufacturing overhead cost by the predetermined overhead rate we can get the actual direct labor hours worked and the same is applied