Restoration, Inc., a leading manufacturer of antique car parts, divided its manufacturing process into two Departments - Production and Packing. The estimated overhead costs for the Production and Packing departments amounted to $14,000,000 and $20,000,000, respectively. The company produces two types of parts - Part 1 and Part 2. The total estimated labor hours for the year were 40,000, and estimated machine hours were 35,000. The Production department is mechanized, whereas the Packing department is labor oriented. Calculate departmental predetermined overhead allocation rates.
$$\begin{array} { | l | c | c | }
\hline & \text { Production } & \text { Packing } \
\hline & \text { Machine hours } & \text { Labor hours } \
\hline \text { Part 1 } & 10,000 & 30,000 \
\hline \text { Part 2 } & \underline { 25,000 } & \underline { 10,000 } \
\hline & \underline { 35,000 } & \underline { 40,000 } \
\hline
\end{array}$$

Question

Restoration, Inc., a leading manufacturer of antique car parts, divided its manufacturing process into two Departments - Production and Packing. The estimated overhead costs for the Production and Packing departments amounted to $14,000,000 and $20,000,000, respectively. The company produces two types of parts - Part 1 and Part 2. The total estimated labor hours for the year were 40,000, and estimated machine hours were 35,000. The Production department is mechanized, whereas the Packing department is labor oriented. Calculate departmental predetermined overhead allocation rates.
 $$\begin{array} { | l | c | c | } 
\hline & \text { Production } & \text { Packing } \
\hline & \text { Machine hours } & \text { Labor hours } \
\hline \text { Part 1 } & 10,000 & 30,000 \
\hline \text { Part 2 } & \underline { 25,000 } & \underline { 10,000 } \
\hline & \underline { 35,000 } & \underline { 40,000 } \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of Restoration, Inc., a leading manufacturer of antique car parts, divided its manufacturing process into two Departments - Production and Packing. The estimated overhead costs for the Production and Packing departments amounted to $14,000,000 and $20,000,000, respectively. The company produces two types of parts - Part 1 and Part 2. The total estimated labor hours for the year were 40,000, and estimated machine hours were 35,000. The Production department is mechanized, whereas the Packing department is labor oriented. Calculate departmental predetermined overhead allocation rates.
 $$\begin{array} { | l | c | c | } 
\hline & \text { Production } & \text { Packing } \
\hline & \text { Machine hours } & \text { Labor hours } \
\hline \text { Part 1 } & 10,000 & 30,000 \
\hline \text { Part 2 } & \underline { 25,000 } & \underline { 10,000 } \
\hline & \underline { 35,000 } & \underline { 40,000 } \
\hline
\end{array}$$