sage Based on research the following information was gathered for the upooming y

Question

sage Based on research the following information was gathered for the upooming year Estimated Manufacturing Ovwrhead by $700,000 Trail Running Shoes Enishing Department 400,000 30.000 machine hours 70,000 madine hours 5000 direct labor hours 5,000 drelabor hours Running Appare frnishing department, respectively (Round any intermediary caloulations and your final answor to the nearest cent) O A $3.50 per machine hour and $5.00 per direct labor hour O C. $5.50 per machine hour and $13.75 per dinect labor our ovehesd is driven ty machine hours or the machining depatment and drect labor hours for the nishing department Based on this information, what is the departmental menufacturing overhead rato for the machining and O D. $538 per machine heour and $5 33 per direct labor hour

Explanation / Answer

Activity cost pools Cost drivers Estimated overhead cost Machining Department Machine Hours $700,000 Finishing Department Direct Labour Hour $400,000 Activity-based overhead rates Machining Department = Total cost/Total machine hour = $700,000/(130,000+70,000) = 3.50 per machine hour Finishing Department = Total cost/Total direct hour = $400,000/(5,000+75,000) = 5.00 per direct hour

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