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31 October, 00:56

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: Casting Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5,000 Estimated total fixed manufacturing overhead cost $ 17,700 $ 5,800 $ 23,500 Estimated variable manufacturing overhead cost per MH $ 1.50 $ 2.20 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: $1.50 $7.40 $5.90 $6.48

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  1. 31 October, 01:03
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    The correct answer is B.

    Explanation:

    Giving the following information:

    Casting:

    Total Estimated total machine-hours (MHs) 3,000 Estimated total fixed manufacturing overhead cost $ 17,700

    Estimated variable manufacturing overhead cost per MH $ 1.50

    To calculate the estimated manufacturing overhead rate we need to use the following formula:

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

    Estimated manufacturing overhead rate = (17,700/3,000) + 1.50 = $7.4 per machine hour
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