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:

-Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.That predetermined manufacturing overhead rate is closest to:
A) $4.70
B) $7.40
C) $6.48
D) $3.70

Question

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:
 
-Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours.That predetermined manufacturing overhead rate is closest to:
A) $4.70 
B) $7.40 
C) $6.48 
D) $3.70

Quizplus · Accepted Answer

The first step is to calculate the estimated total overhead costs in the two departments.
Casting
 11ea7761_1960_d20d_81a5_cd1747fddbd5_TB2580_00 Assembly
 11ea7761_1960_d20e_81a5_a56816a5794d_TB2580_00 The second step is to combine the estimated manufacturing overhead costs in the two departments ($22,200 + $10,200 = $32,400) to calculate the plantwide predetermined overhead rate as follow:
 11ea7761_1960_d20f_81a5_9b8403cd47e5_TB2580_00

Claybrooks Corporation Has Two Manufacturing Departments--Casting and Assembly