Vanliere Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: During the current month the company started and finished Job A803. The following data were recorded for this job:
The predetermined overhead rate for the Finishing Department is closest to:
A) $8.80 per direct labor-hour
B) $3.98 per direct labor-hour
C) $12.60 per direct labor-hour
D) $3.80 per direct labor-hour

Question

Vanliere Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:  During the current month the company started and finished Job A803. The following data were recorded for this job:
 The predetermined overhead rate for the Finishing Department is closest to:
A) $8.80 per direct labor-hour 
B) $3.98 per direct labor-hour 
C) $12.60 per direct labor-hour 
D) $3.80 per direct labor-hour

Quizplus · Accepted Answer

The Answer of Vanliere Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:  During the current month the company started and finished Job A803. The following data were recorded for this job:
 The predetermined overhead rate for the Finishing Department is closest to:
A) $8.80 per direct labor-hour 
B) $3.98 per direct labor-hour 
C) $12.60 per direct labor-hour 
D) $3.80 per direct labor-hour

Vanliere Corporation Has Two Production Departments, Machining and Finishing