Kryzski Company has a predetermined overhead rate of $6 per direct labour hour.Last year the company incurred $156,600 of actual manufacturing overhead cost and the account was $12,600 underapplied.How many direct labour hours were worked during the year?
A)24,000
B)25,000
C)26,000
D)28,200

Question

Quizplus · Accepted Answer

The predetermined overhead rate is $6 per direct labour hour. The actual manufacturing overhead cost incurred was $156,600. The account was $12,600 underapplied. This means that the company applied $12,600 less overhead to production than it actually incurred. To calculate the number of direct labour hours worked during the year, we can use the following formula:Direct labour hours = Actual manufacturing overhead cost / Predetermined overhead rateDirect labour hours = $156,600 / $6Direct labour hours = 26,100Therefore, the number of direct labour hours worked during the year was 26,100.

Kryzski Company Has a Predetermined Overhead Rate of $6 Per