XYZ company uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. X and on machine-hours in Dept. Y. At the beginning of the year, the Corporation made the following estimates: Dept. X Dept. Y Direct labor cost OMR 40,000 OMR 60,000 Manufacturing overhead OMR 60,000 OMR 100,000 Direct labor-hours 6,000 9,000 Machine-hours 15,000 20,000 What predetermined overhead rates would be used in Dept. X and Dept. Y, respectively?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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XYZ company uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is
based on labor cost in Dept. X and on machine-hours in Dept. Y. At the beginning of the year, the Corporation made the following
estimates:
Dept. X
Dept. Y
Direct labor cost
OMR 40,000 OMR 60,000
Manufacturing overhead
OMR 60,000 OMR 100,000
Direct labor-hours
6,000
9,000
Machine-hours
15,000
20,000
What predetermined overhead rates would be used in Dept. X and Dept. Y, respectively?
a.
150% and OMR 5.00
b. 167% and OMR 4.00
C.
167% and OMR 6.67
d. None of the given answers
e.
200% and OMR 4.00
Transcribed Image Text:XYZ company uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. X and on machine-hours in Dept. Y. At the beginning of the year, the Corporation made the following estimates: Dept. X Dept. Y Direct labor cost OMR 40,000 OMR 60,000 Manufacturing overhead OMR 60,000 OMR 100,000 Direct labor-hours 6,000 9,000 Machine-hours 15,000 20,000 What predetermined overhead rates would be used in Dept. X and Dept. Y, respectively? a. 150% and OMR 5.00 b. 167% and OMR 4.00 C. 167% and OMR 6.67 d. None of the given answers e. 200% and OMR 4.00
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