Principles of Auditing & Other Assurance Services (Irwin Accounting)
Principles of Auditing & Other Assurance Services (Irwin Accounting)
20th Edition
ISBN: 9780077729141
Author: Ray Whittington, Kurt Pany
Publisher: McGraw-Hill Education
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Chapter 9, Problem 20RQ
To determine

Explain the procedures of obtaining the estimate of a population’s standard deviation to determine appropriate sample size.

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At the beginning of the year, manufacturing overhead for the year was estimated to be $315,840. At the end of the year, actual direct labor-hours for the year were 25,800 hours, the actual manufacturing overhead for the year was $308,700, and manufacturing overhead for the year was overapplied by $14,500. If the predetermined overhead rate is based on direct labor-hours, then what must have been the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate?
At the beginning of the year, manufacturing overhead for the year was estimated to be $800,000. At the end of the year, actual labor hours for the year were 40,000 hours, the actual manufacturing overhead for the year was $775,000, and the manufacturing overhead for the year was overapplied by $25,000. If the predetermined overhead rate is based on direct labor hours, then the estimated labor hours at the beginning of the year used in the predetermined overhead rate must have been ___ Hours.
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