Asked by Cameron Brown on Jun 07, 2024

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Use the data for Wall Nuts,Inc.to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.

A) $4.50 per MH in Dept.A; $4.50 per MH in Dept.B.
B) $7.50 per MH in Dept.A; $7.50 per MH in Dept.B.
C) $4.50 per MH in Dept.A; $7.50 per MH in Dept.B.
D) $2.70 per MH in Dept.A; $6.00 per MH in Dept.B.
E) $0.60 per MH in Dept.A; $0.80 per MH in Dept.B.

Departmental Overhead Rates

The overhead costs charged to specific departments based on their respective activities or consumption of resources.

Machine Hours

The total number of hours that machinery is operating during a certain period, often used in costing and operational efficiency analysis.

Oak Paneling

Decorative interior panels made from oak wood, often used in furniture, flooring, and wall covering.

  • Derive the overhead rates for various departments.
  • Implement the allocation of overhead costs onto products by employing departmental and plantwide rates.
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JN
Jennifer NoriegaJun 11, 2024
Final Answer :
C
Explanation :
To calculate departmental overhead rates based on machine hours (MH), you divide the total overhead for each department by the total machine hours in that department. The correct rates are $4.50 per MH in Department A and $7.50 per MH in Department B, indicating different overhead costs and/or machine usage between the two departments.