Question

A company produces heating elements that go through two operations, casting and assembling, before they are complete. Expected costs and activities for the two departments are shown below. Given this information, the departmental overhead rate for the assembling department based on direct labor hours is $5 per direct labor hour.

Casting Assembling
Direct labor hours 1,875 DLH 7,500 DLH
Machine hours 12,500 MH 3,750 MH
Overhead costs $75,000 $37,500

Answer

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