Question

Technics Inc., a manufacturing company, utilizes job order costing. Each division establishes its own estimates regarding overhead, which are as follows:

Division ADivision B
Total estimated factory overhead$128,000$261,000
Total estimated machine hours 16,000 72,500
Total estimated direct labor hours$155,000$290,000

If Division A allocates overhead on the basis of machine hours and Division B allocates overhead as a percentage of direct labor costs, what would the predetermined factory overhead rate be for each division?

Answer

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