Question

Golden Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 22,300 hours. At the end of the year, actual direct labor-hours for the year were 21,100 hours, the actual manufacturing overhead for the year was $538,980, and manufacturing overhead for the year was underapplied by $24,140. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been

Answer 1

$544,120

Step-by-step explanation:

Calculation for what The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been

First step is to calculate the Applied manufacturing overhead

Applied manufacturing overhead = $538,980 - $24,140

Applied manufacturing overhead = $514,840

Second step is to calculate the Predetermined overhead rate using this formula

Predetermined overhead rate = Applied manufacturing overhead / Actual direct labor hours

Let plug in the formula

Predetermined overhead rate = $514,840 / 21,100

Predetermined overhead rate = $24.4

Now let calculate the Estimated total manufacturing overheads using this formula

Estimated total manufacturing overheads = Estimated direct labor hours * Predetermined overhead rate

Let plug in the formula

Estimated total manufacturing overheads= 22,300 *$24.4

Estimated total manufacturing overheads= $544,120

Therefore The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been $544,120