Solution:
Overhead applied = Actual manufacturing overhead - Underapplied overhead
= $392,000 - $7,200 = $384,800
Actual labor hours = Overhead applied / Predetermined overhead rate = $384,800 / $8 = 48100 direct labor hours
Hence first option is correct.
14 Farrina Manufacturing uses a predetermined overhead application rate of $8 per direct labor hour. A...
Simone 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: cannot be determined based on the information presented. a.50,900 b.48,100 c.49,100 d.49,900
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