Biology Forums - Study Force

Tarrant Corporation has two manufacturing departments--Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

	Casting	Finishing	Total
Estimated total machine-hours (MHs)	1,000	4,000	5,000
Estimated total fixed manufacturing overhead cost	$ 5,700	$ 11,200	$ 16,900
Estimated variable manufacturing overhead cost per MH	$ 1.30	$ 2.90

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:

▸ $5.70

▸ $1.30

▸ $5.96

▸ $7.00

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