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Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labour cost basis in Department A and on a machine
Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labour 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:
Department A | Department B | |
Direct labour cost | $56,000 | $33,000 |
Manufacturing overhead | $67,200 | $45,000 |
Direct labour hours | 8,000 | 9,000 |
Machine hours | 4,000 | 15,000 |
What predetermined overhead rate would be used in Departments A and B, respectively?
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