Biology Forums - Study Force

The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Department A and on machine-hours in Department B. At the beginning of the year, the Corporation made the following estimates:

	Department A	Department B
Direct labor cost	$ 60,000	$ 40,000
Manufacturing overhead	$ 90,000	$ 45,000
Direct labor-hours	6,000	9,000
Machine-hours	2,000	15,000

What predetermined overhead rates would be used in Department A and Department B, respectively?

▸ 67% and $3.00

▸ 150% and $5.00

▸ 150% and $3.00

▸ 67% and $5.00

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