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

Question

Quizplus · Accepted Answer

The predetermined overhead rate is $6 per direct labor hour. The actual manufacturing overhead cost incurred was $156,600. The account was $12,600 underapplied. This means that the actual overhead cost was $12,600 less than the applied overhead cost. The applied overhead cost is the predetermined overhead rate multiplied by the number of direct labor hours worked. Therefore, the number of direct labor hours worked can be calculated as follows:Applied overhead cost = Predetermined overhead rate * Direct labor hours worked$156,600 - $12,600 = $6 * Direct labor hours worked$144,000 = $6 * Direct labor hours workedDirect labor hours worked = $144,000 / $6Direct labor hours worked = 24,000 hours

Kryzski Company Has a Predetermined Overhead Rate of $6 Per