Question

Tyler Company applies manufacturing overhead to production at the rate of $4.9 per direct labor hour and ended August with $12,900 underapplied overhead. Actual manufacturing overhead incurred for August amounted to $110,410.
How many direct labor hours did Tyler Company incur during August?

Answer 1

Answer: 19,900 hours

Explanation:

Direct Labor hours = Applied Manufacturing Overhead/ Applied Overhead rate per hour

Applied Manufacturing Overhead

When the overhead is said to be under-applied, the Applied overhead is less than the Actual Overhead.

To find the Applied overhead therefore;

= Actual Overhead - Under-applied amount

= 110,410 - 12,900

= $97,510

Direct Labor hours = Applied Manufacturing Overhead/ Applied Overhead rate per hour

= 97,510/4.9

= 19,900 hours