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The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead...

The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labour cost in Department A and on machine hours in Department B. At the beginning of the year, the company made the following estimates: Department A Department B Direct labour cost $30,000 $40,000 Manufacturing overhead $60,000 $50,000 Direct labour hours 6,000 8,000 Machine hours 2,000 10,000 What predetermined overhead rates would be used in Departments A and B, respectively? Multiple Choice 50% and $8.00. 50% and $5.00. 110% and $15.00. 200% and $5.00.

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Expert Solution

Department
A
60,000/30000
200%
B
50,000/10,000
5
answer) 200% and $5

ekkarill92 answered 2 years ago
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