.. produces widgets and currently uses a plantwide overhead rate, based on machine hours. Markoff, the plant manager, has heard about departmental overhead application rates in his cost accounting class and feels that these rates can offer significantly better cost assignments than can a plantwide rate.

They have the following data for its two departments for the coming year:

		Dept A	Dept B
Budgeted overhead costs		$720,000	$180,000
Normal activity (machine hours)		120,000	60,000

Show the following t-accounts: Raw Material, Work in Process, Finished Goods, Cost of Goods Sold

in regards to predetermined overhead rates for the plan as a whole and for each department based on machine hours

Suppose that a widget (Product Alpha) used 60 machine hours from Department A and 150 machine hours from Department B. A second widget (Product Beta) used 150 machine hours from Department A and 60 machine hours from Department B: show the overhead cost for each product, plantwide rate, and departmental rates