Marvel Company uses a predetermined overhead rate in applying overhead to production orders on a labor-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:

	Dept. A				Dept. B
Direct labor cost	$	56,000			$	33,000
Factory overhead	$	67,200			$	45,000
Direct labor-hours		8,000				9,000
Machine-hours		4,000				15,000

What predetermined overhead rate would be used in Department A and Department B, respectively?

Multiple Choice

• 83% and $5.

• 83% and $3.

• 120% and $3.

• 120% and $5.