The Putman 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: Direct labor cost Manufacturing overhead Direct labor-hours Machine-hours O 67% and $3.00 150% and $5.00 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? 150% and $3.00 Dept. A Dept. B $ 60,000 $ $ 90,000 $ 67% and $5.00 6,000 2,000 40,000 45,000 9,000 15,000

The Putman 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: Direct labor cost Manufacturing overhead Direct labor-hours Machine-hours O 67% and $3.00 150% and $5.00 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? 150% and $3.00 Dept. A Dept. B $ 60,000 $ $ 90,000 $ 67% and $5.00 6,000 2,000 40,000 45,000 9,000 15,000

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Description: The Putman Corporation uses a predetermined overhead rate to applymanufacturing overhead to jobs. The predetermined overhead rate isbased on labor cost in Dept. A and on machine-hours in Dept. B. At thebeginning of the year, the Corporation made the

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

The Putman 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:
Direct labor cost
Manufacturing overhead
Direct labor-hours
Machine-hours
67% and $3.00
What predetermined overhead rates would be used in Dept. A and Dept.
B, respectively?
O 150% and $5.00
150% and $3.00
Dept. A Dept. B
$ 60,000 S
$ 90,000 $
6,000
2,000
67% and $5.00
40,000
45,000
9,000
15,000

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