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Dickson Company has two production departments, Cooking and Packaging. The company uses a job- order costing system and computes a predetermined overhead rate in
Dickson Company has two production departments, Cooking and Packaging. The company uses a job- order costing system and computes a predetermined overhead rate in each production department. The predetermined overhead rate in the Cooking Department is based on machine-hours and in the Packaging Department it is based on direct labor-hours. The following are the estimated MOH costs and estimated allocation base amounts for each department: Estimated Machine Hours Estimated Direct Labor Hours Est. Total Fixed MOH Est. Variable MOH per Machine Hour Est. Variable MOH per Direct Labor Hr. estimates Cooking Packaging 50,000 MHs 100,000 DLHS $150,000 $5/MH $330,000 $3.10/DLH Calculate the Predetermine Overhead Rate (POHR) for each department. (remember to calculate the total estimated MOH for each department, then divide it by the estimated allocation base). Use 2 decimal places. Cooking Department POHR: $ per machine hour Packaging Department POHR: $ per direct labor hour
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