Business, 07.10.2019 19:30 matthewquattlebum

White company has two departments, cutting and finishing. the company uses a job-order costing system and computes a predetermined overhead rate in each department. the cutting department bases its rate on machine-hours, and the finishing department bases its rate on direct labor-hours. at the beginning of the year, the company made the following estimates:

department cutting finishing
direct labor-hours . . . . . . . . . . . . . . 6,000 30,000
machine-hours . . . . . . . . . . . . . . . . .48,000 5,000
total fixed manufacturing overhead cost . . . . . . .$264,000 $366,000
variable manufacturing overhead per machine-hour . . $2.00 —
variable manufacturing overhead per direct labor-hour . $4.00
(compute the predetermined overhead rate to be used in each department.

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