Question

Farrina Manufacturing uses a predetermined overhead application rate of $8 per direct labor hour. A review of the company's accounting records for the year just ended discovered the following: Underapplied manufacturing overhead: $7,200 Actual manufacturing overhead: $392,000 Budgeted labor hours: 50,000

Simone's actual labor hours worked totaled:_______.
a. 49,100.
b. 49,900.
c. 48,100.
d. 50,900.
e. cannot be determined based on the information presented.

Answer 1

Farrina Manufacturing uses a predetermined overhead application rate of $8 per direct labor hour. A review of the company's accounting records for the year just ended discovered the following: Underapplied manufacturing overhead: $7,200 Actual manufacturing overhead: $392,000 Budgeted labor hours: 50,000

Simone's actual labor hours worked totaled:_______.

a. 49,100.

b. 49,900.

c. 48,100.

d. 50,900.

e. cannot be determined based on the information presented.

-KeonLee

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Answer 2

c. 48,100.

Step-by-step explanation:

The computation of the actual labor hours worked is shown below;

Actual Overhead $392,000.00

Less: Underapplied overhead $7,200.00

Applied Overhead ($392,000 - $,7200) $384,800.00

Predetermined overhead rate $8.00

Actual labor hours ($384,800 ÷ 8) $48,100

hence, the actual labor hours worked is $48,100

Therefore the option c is correct