Question

A company produces paint that goes through two operations, operation A and operation B, before it is complete. Expected costs and activities for the two departments are shown below. Given this information, the departmental overhead rate for Department B based on machine hours is $4 per machine hour.

Department A Department B
Machine hours 50,000 MH 60,000 MH
Direct labor hours 78,500 DLH 100,800 DLH
Overhead costs $392,500 $403,200

Answer

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