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3 September, 00:55

Marvel Company uses a predetermined overhead rate in applying overhead to production orders on a labor-cost basis in Department A and on a machine-hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: Dept. A Dept. B Direct labor cost $ 57,000 $ 34,000 Factory overhead $ 71,250 $ 46,055 Direct labor-hours 8,100 9,100 Machine-hours 4,100 15,100 What predetermined overhead rate would be used in Department A and Department B, respectively?

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  1. 3 September, 01:29
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    Instructions are listed below

    Explanation:

    Giving the following information:

    Marvel Company uses a predetermined overhead rate in applying overhead to production orders on a labor-cost basis in Department A and on a machine-hours basis in Department B.

    Dept. A

    Factory overhead $ 71,250

    Direct labor-hours 8,100

    Dept. B

    Factory overhead $46,055

    Machine-hours 15,100

    Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base=

    Dept A:

    Estimated manufacturing overhead rate = 71250/8100 = $8.80 per direct labor hour

    Dept B:

    Estimated manufacturing overhead rate = 46055/15100 = $3.05 per direct machine hour
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