Answer:
Estimated direct labor hours= 180,000
Explanation:
Giving the following information:
Overhead for the year was estimated to be $900,000.
Smith has applied overhead of $73,000
It applies overhead based on direct labor hours and those equaled 14,600 in November.
We have to reverse engineer the allocation method for manufacturing overhead.
First, we need to calculate the estimated overhead rate:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
73,000= Estimated manufacturing overhead rate*14,600
$5= Estimated manufacturing overhead rate
Estimated manufacturing overhead rate= $5 per direct labor hour
Now, we can determine the estimated direct labor hours:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
5= 900,000/ total amount of allocation base
5*X= 900,000
total amount of allocation base= 180,000
Estimated direct labor hours= 180,000
Answer:
estimated labor hours 180,000
Explanation:
The applied overhead is the cost driver times the predetermined overhead rate:
rate x 14,600 = 73,000
rate = 73.000 / 14,600 = 5
Then, the predetermined overhead rate: is determinate as follows:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
900,000 expected overhead / expected labor hours = 5
900,000 /5 = expected labor hours = 180,000
