Claybrooks Corporation has two manufacturing departments--Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 17,700 $ 5,800 $ 23,500 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 2.20 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Casting Department is closest to: $1.50 $7.40 $5.90 $6.48

Question

Business

Makenna Santana

17 January, 12:36

Claybrooks Corporation has two manufacturing departments--Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Casting Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 17,700 $ 5,800 $ 23,500 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 2.20 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Casting Department is closest to: $1.50 $7.40 $5.90 $6.48

+1

Answers (1)

Know the Answer?

Lance · Answer 1

The correct answer is B.

Explanation:

Giving the following information:

Casting:

Total Estimated total machine-hours (MHs) 3,000 Estimated total fixed manufacturing overhead cost $ 17,700

Estimated variable manufacturing overhead cost per MH $ 1.50

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Estimated manufacturing overhead rate = (17,700/3,000) + 1.50 = $7.4 per machine hour