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Made Well Tool, Inc., a manufacturer of cutting tools, divided its manufacturing process into two Departments - Machining and Finishing. The estimated overhead costs for
Made Well Tool, Inc., a manufacturer of cutting tools, divided its manufacturing process into two Departments - Machining and Finishing. The estimated overhead costs for the Machining and Finishing departments amounted to $400,000 and $1,000,000, respectively. The company produces two types of tools-- Standard and Deluxe. The total estimated labor hours for the year were 4,000 and total estimated machine hours were 2,000. The Machining department is mechanized, whereas the Finishing department is labor oriented. Calculate departmental predetermined overhead allocation rates. Machining Finishing Labor hours Machine hours 1,800 Standard 500 1,500 2,200 Deluxe 4,000 2,000
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