The Crater Company uses predetermined overhead rates to allocate manufacturing overhead to products. The predetermined overhead rate is based on labor cost in Dept. A and machine-hours in Dept. B. At the beginning of the year, the company made the following estimates:   Dept A   Dept B Direct labor cost $ 83,000     $ 60,000   Manufacturing overhead $ 190,900     $ 117,300   Direct labor-hours   9,800       11,800   Machine-hours   4,800       13,800     What predetermined overhead rates would be used in Dept A and Dept B, respectively?     Multiple Choice   116.72% and $9.30.   125% and $22.00.   230% and $8.50.   230% and $9.30.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The Crater Company uses predetermined overhead rates to allocate manufacturing overhead to products. The predetermined overhead rate is based on labor cost in Dept. A and machine-hours in Dept. B. At the beginning of the year, the company made the following estimates:

  Dept A   Dept B
Direct labor cost $ 83,000     $ 60,000  
Manufacturing overhead $ 190,900     $ 117,300  
Direct labor-hours   9,800       11,800  
Machine-hours   4,800       13,800  
 


What predetermined overhead rates would be used in Dept A and Dept B, respectively?

 

 

Multiple Choice
  •  

    116.72% and $9.30.

  •  

    125% and $22.00.

  •  

    230% and $8.50.

  •  

    230% and $9.30.

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