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Merati Corporation has two manufacturing departments--Forming and Assembly. The company used the ...

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Merati Corporation has two manufacturing departments--Forming and Assembly. The company used the ...

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

	Forming	Assembly	Total
Estimated total machine-hours (MHs)	5,000	5,000	10,000
Estimated total fixed manufacturing overhead cost	$ 28,000	$ 10,500	$ 38,500
Estimated variable manufacturing overhead cost per MH	$ 1.80	$ 2.60

During the most recent month, the company started and completed two jobs--Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow:

	Job B	Job L
Forming machine-hours	3,400	1,600
Assembly machine-hours	2,000	3,000

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 Forming Department is closest to:

▸ $5.60

▸ $7.40

▸ $1.80

▸ $6.05

Textbook

Introduction to Managerial Accounting: Brewer Edition: 9e

Edition: 9^th

Authors: Brewer, Garrison, Noreen

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