Question 6 Mitchell\' s Softball Gloves Company estimated the following at the b

Question

Question 6 Mitchell' s Softball Gloves Company estimated the following at the beginning of the year: Assembly Department Testing Department Total Overhead $570,000 $130,000 $700,000 Direct Labor Hours 142,500 32,500 175,000 Machine Hours 32,000 65,000 97,000 Mitchell uses departmental overhead rates. In the assembly department, direct labor hours are used to apply overhead. Machine hours are used to apply overhead in the testing department. Actual data for August is as follows: Assembly Department Testing Department Total Overhead $42,000 $12,000 $54,000 Direct Labor Hours 13,500 2,430 15,930 Machine Hours 4,020 11,000 15,020 Mitchell decides to continue using departmental overhead rates. What are the predetermined rates for the Assembly and Testing departments respectively? Answer Assembly: $4 per direct labor hour; Testing: $2 per machine hour Assembly: $2 per direct labor hour; Testing: $4 per machine hour Assembly: $4 per direct labor hour; Testing: $4 per direct labor hour Assembly: $7.22 per machine hour; Testing: $7.22 per machine hour none of these

Explanation / Answer

Assembly: $2 per direct labor hour; Testing: $4 per machine hour

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