u manu tacturing overhead Actual machine-hours 5. The Golden Star Corporation us
ID: 2597740 • Letter: U
Question
u manu tacturing overhead Actual machine-hours 5. The Golden Star Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Dept. A Dept. B Direct labor cost Manufacturing overhead Direct labor-hours Machine-hours S 60,000 S 40,000 $ 90,000 S 45,000 6,000 9,000 2,000 15,000 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? b. c. d. 67% and $3.00 150% and $5.00 150% and $3.00 67% and $5.00Explanation / Answer
Answer is C.
Department A:
Manufacturing Overhead = $90,000
Direct Labor Cost = $60,000
Predetermined Overhead Rate = Manufacturing Overhead / Direct Labor Cost
Predetermined Overhead Rate = $90,000 / $60,000
Predetermined Overhead Rate = 150%
Department B:
Manufacturing Overhead = $45,000
Machine hours = 15,000
Predetermined Overhead Rate = Manufacturing Overhead / Machine hours
Predetermined Overhead Rate = $45,000 / 15,000
Predetermined Overhead Rate = $3.00
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