White Company has two departments, Cutting and Finishing.The company uses a job-order costing system and computes a predetermined overhead rate for each department.The Cutting Department bases its rate on machine-hours and the Finishing Department bases its rate on direct labor-hours.At the beginning of the year, the company made the following estimates: Department Cutting FinishingDirect labor-hours 7,700 43,000Machine-hours 43,400 1,900Total fixed manufacturing overhead cost $390,000 $496,000Variable manufacturing overhead per machine-hour $2.00 Variable manufacturing overhead per direct labor-hour $3.75Compute the predetermined overhead rate for each department.

Respuesta :

Answer:

The predetermined overhead rate for Cutting department is $10.99

The predetermined overhead rate for Finishing department is $15.28  

Explanation:

Each department's fixed and variable overhead costs were added together,then divide by the driver of overhead in each department,direct labor hours or machine hours as applicable.

Find attached spreadsheet for necessary calculations.

Ver imagen abdulmajeedabiodunac