Acompany uses the departmental overhead rate method. total overhead costs are $5,000,000. of this total, the machining department is assigned overhead costs of $4,000,000 and the assembly department is allocated the remainder. the machining department uses machine hours as their allocation base and has 80,000 machine hours. the assembly department uses direct labor hours as their allocation base and has 50,000 direct labor hours. calculate the overhead rate for the machining department.

Estimated manufacturing overhead rate= $50 per machine hour

Explanation:

Giving the following information:

The machining department uses machine hours as its allocation base and has 80,000 machine hours. The machining department is assigned overhead costs of $4,000,000.

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base= 4000000/80000= $50 per machine hour

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: