Question
Magglio Company produces two products, Bop and Mop in a small manufacturing plant which had total manufacturing overhead of $52,000 in June and used 800
Magglio Company produces two products, Bop and Mop in a small manufacturing plant which had total manufacturing overhead of $52,000 in June and used 800 direct labor hours. The factory has two departments, Preparation, which incurred $32,000 of manufacturing overhead, and Processing which incurred $20,000 of manufacturing overhead. Preparation used 500 hours of direct labor and Processing used 200 machine hours. During June, 400 direct labor hours were used in making 100 units of Bop, and 400 were used in making 100 units of Mop. Assume that instead of using a plant wide overhead rate, Magglio used departmental rates based on direct labor hours for the Preparation Department and machine hours for the Processing Department. The departmental overhead rates for the Preparation and Processing Departments were:
Select one:
A. $100 per direct labor hour for Preparation, and $64 per machine hour for Processing
B. $74.29 per direct labor hour for Preparation, and $74.29 per machine hour for Processing
C. $65 per direct labor hour for both Preparation and Processing
D. $64 per direct labor hour Preparation, and $100 per machine hour for Processing
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