Question

Tyare Corporation had the following inventory balances at the beginning and end of May:_______.

May 1 May 30
Raw materials $ 27,500 $ 34,000
Finished Goods $ 77,000 $ 70,000
Work in Process $ 15,500 $ 16,808
During May, $60,500 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 340 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 $7,250 of direct materials cost. The Corporation incurred $42,600 of actual manufacturing overhead cost during the month and applied $40,800 in manufacturing overhead cost. The actual direct labor-hours worked during May totaled:______.
a. $60,500
b. $71,192
c. $54,000
d. $67,000

Answer 1

354 hours

Step-by-step explanation:

Direct material cost = $7,250

Actual manufacturing overhead cost = $40,800

Applied manufacturing overhead cost = $40,800

The given value if work process at end of May(May 30) = $16,808 and & $7,250 was used as direct material cost.

Thus, remaining labor and overhead = $16,808 - $7,250 = $9,558

Given an overhead rate of $12 per hour and labor rate of $15 per hour

Overhead rate + labor rate = $12 + $15 = $27 per hour

Direct labour hours worked =

$9,558 ÷ $27 = 354 hours

Therefore the actual direct labor hours worked during may is 354 hours

None of the given option is correct. They are stated in $ and the values are unrealistic.