Question

Aurora Corporation produces outdoor security lighting products. All products go through three processes before completion. Use the expected overhead costs and related data shown below to compute departmental overhead rates based on machine hours in Department A1A; based on direct labor hours in Department B2B; and machine hours in Department C3C.

Department A1A Department B2B Department C3C
Direct labor hours 90,000 DLH 80,000 DLH 72,000 DLH
Machine hours 54,000 MH 32,000 MH 54,000 MH
Manufacturing overhead costs $540,000 $160,000 $216,000

A. Dept. A: $10 per MH; Dept B: $2 per DLH; Dept C: $4 per MH.
B. Dept. A: $6 per MH; Dept B: $5 per DLH; Dept C: $3 per MH.
C. Dept. A: $10 per MH; Dept B: $5 per DLH; Dept C: $4 per MH.
D. Dept. A: $6 per MH; Dept B: $5 per DLH; Dept C: $4 per MH.
E. Dept. A: $10 per MH; Dept B: $2 per DLH; Dept C: $3 per MH.

Answer

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