The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labour cost in Department A and on machine hours in Department B. At the beginning of the year, the company made the following estimates: 13 Department A Department B Direct labour cost $50,000 $40,000 Manufacturing $60,000 $50,000 overhead Direct labour hours 6,000 8,000 Machine hours 12,000 5,000 What predetermined overhead rates would be used in Departments A and B, respectively? 1) Dept A: 200% and Dept B: $5.00. 2) Dept A: $5 and Dept B: 125%. Direct labour cost $50,000 $40,000 Manufacturing $60,000 $50,000 overhead Direct labour hours 6,000 8,000 Machine hours 12,000 5,000 What predetermined overhead rates would be used in Departments A and B, respectively? 1) Dept A: 200% and Dept B: $5.00. 2) Dept A: $5 and Dept B: 125%. 3) Dept A: 120% and Dept B: $10.00. 4) Dept A: $30 and Dept B:125%