Morataya Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
During the most recent month, the company started and completed two jobs--Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow:

-Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.That predetermined manufacturing overhead rate is closest to:
A) $4.00
B) $7.50
C) $4.58
D) $6.54

Question

Morataya Corporation has two manufacturing departments--Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates:
  During the most recent month, the company started and completed two jobs--Job B and Job G. There were no beginning inventories. Data concerning those two jobs follow:
 
-Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.That predetermined manufacturing overhead rate is closest to:
A) $4.00 
B) $7.50 
C) $4.58 
D) $6.54

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Machining
 11ea7761_1932_2106_81a5_6739013173c0_TB2580_00 Assembly
 11ea7761_1932_4817_81a5_dd1cdfaccd43_TB2580_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($52,500 + $12,900 = $65,400) to calculate the plantwide predetermined overhead rate as follow:
 11ea7761_1932_4818_81a5_db7784c61c45_TB2580_00

Morataya Corporation Has Two Manufacturing Departments--Machining and Assembly