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Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labor cost basis in Department A and on a machine-hours
Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labor cost basis in Department A and on a machine-hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates:
Dept A Dept B
Direct Labor Cost $56,000 $33,000
Manufacturing Overhead $67,200 $45,000
Direct Labor-Hours 8,000 9,000
Machine Hours 4,000 15,000
What predetermined overhead rate would be used in Department A and Department B, respectively?
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