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Departmental Overhead Rates Mariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based on machine hours. Alice Chen, the plant manager,
Departmental Overhead Rates Mariposa, Inc., produces machine tools and currently uses a plantwide overhead rate, based on machine hours. Alice Chen, the plant manager, has heard that departmental overhead rates can offer significantly better cost assignments than can a plantwide rate. Mariposa has the following data for its two departments for the coming year: Department A Department B Overhead costs (expected) $864,000 $216,000 Normal activity (machine hours) 120,000 60,000 Required: 1. Compute a predetermined overhead rate for the plant as a whole based on machine hours. per machine hour 2. Compute predetermined overhead rates for each department using machine hours. Round your answers to one decimal place. Department A per machine hour Department B per machine hour
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