At the Beginning of the Year, Manufacturing Overhead for the Year

question 49

Multiple Choice

At the beginning of the year, manufacturing overhead for the year was estimated to be $994,125. At the end of the year, actual direct labor-hours for the year were 36,370 hours, the actual manufacturing overhead for the year was $940,000, and manufacturing overhead for the year was overapplied by $60,175. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been: (Do not round intermediate calculations.)

• A) 34,182 direct labor-hours
• B) 36,150 direct labor-hours
• C) 36,370 direct labor-hours
• D) 31,994 direct labor-hours

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Definitions:

Payroll Tax

Levies placed on either employees or employers, often determined as a percentage of the wages that staff receive from employers.

Payroll Taxes

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.

Government Transfer Expenditure

Government spending on programs that provide benefits to individuals or families without requiring direct payment or labor in return, such as social security or unemployment benefits.

Social Security Program

A government program designed to provide financial support to individuals during retirement, disability, or other conditions that affect income.