Question
The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept.
The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates:
| Dept. A | Dept. B | |||
| Direct labor cost | $ | 60,000 | $ | 40,000 |
| Manufacturing overhead | $ | 90,000 | $ | 45,000 |
| Direct labor-hours | 6,000 | 9,000 | ||
| Machine-hours | 2,000 | 15,000 | ||
What predetermined overhead rates would be used in Dept. A and Dept. B, respectively?
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Cost Accounting A Managerial Emphasis
Authors: Madhav, Charles, Srikant
15th Edition
933254221X, 978-9332542211
