High School

John has an applied overhead of $80,000 and an actual overhead of $70,600 for the month of November. He applies overhead based on direct labor hours, which amount to 10,000 hours for November. The overhead for the year was estimated to be $1,120,000. How many direct labor hours were estimated for the year?

Answer :

Answer:

The estimated direct labor hour is 140,000

Explanation:

For computing the direct labor hours, first, we have to compute the predetermined overhead rate. The formula is shown below:

Predetermined overhead rate = (Applied overhead) ÷ (estimated direct labor-hours)

= $80,000 ÷ 10,000 hours

= $8

Now the direct labor hours equal to

= Estimated overhead ÷ predetermined overhead rate

= $1,120,000 ÷ $8

= 140,000

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