Asked by Jordan Ratliff on Apr 25, 2024
Verified
The predetermined overhead rate for the Customizing Department is closest to:
A) $4.55 per direct labor-hour
B) $3.90 per direct labor-hour
C) $10.50 per direct labor-hour
D) $14.40 per direct labor-hour
Predetermined Overhead Rate
A method for distributing manufacturing overhead across production units, utilizing projected costs.
Customizing Department
A department within a company that is dedicated to modifying or adapting products or services to meet specific customer needs or requirements.
Direct Labor-Hour
A measure of the labor time spent directly on the production of goods or services, often used as a basis for allocating labor costs to products.
- Calculate department-specific overhead rates using direct labor-hours or machine-hours as criteria.
Verified Answer
= $63,000 + ($3.90 per direct labor-hour × 6,000 direct labor-hours)
= $63,000 + $23,400 = $86,400
Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base incurred = $86,400 ÷6,000 direct labor-hours = $14.40 per direct labor-hour
Reference: CH02-Ref47
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:
Learning Objectives
- Calculate department-specific overhead rates using direct labor-hours or machine-hours as criteria.
Related questions
The Predetermined Overhead Rate for the Casting Department Is Closest ...
Tarrant Corporation Has Two Manufacturing Departments--Casting and Finishing ...
Odonnel Corporation Uses a Job-Order Costing System with a Single ...
Eisentrout Corporation Has Two Production Departments, Machining and Customizing ...
Eisentrout Corporation Has Two Production Departments, Machining and Customizing ...