Almaraz Corporation has two manufacturing departments--Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to:

Question

Almaraz Corporation has two manufacturing departments--Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:  Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to:

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Forming
 11eacbfc_c6f6_040c_8ffe_615fcafbf857_TB7552_00 Finishing
 11eacbfc_c6f6_040d_8ffe_1d5ba60265ea_TB7552_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($49,700 + $16,500 = $66,200) to calculate the plantwide predetermined overhead rate as follow:
 11eacbfc_c6f6_040e_8ffe_f95430ca2663_TB7552_00

Almaraz Corporation Has Two Manufacturing Departments--Forming and Finishing