Business, 20.02.2020 22:59 sheram2010

Overhead Applied to Jobs, Departmental Overhead Rates Xania Inc. uses a normal job-order costing system. Currently, a plantwide overhead rate based on machine hours is used. Xania’s plant manager has heard that departmental overhead rates can offer significantly better cost assignments than a plantwide rate can offer. Xania has the following data for its two departments for the coming year:

Department A Department B
Overhead costs (expected) $120,000 $80,000
Normal activity (machine hours) 16,000 5,800

Required:

a. Compute a predetermined overhead rate for the plant as a whole based on machine hours. Round your answer to two decimal places.$ per machine hour
b. Compute predetermined overhead rates for each department using machine hours. (Note: Round to two decimal places, if necessary.)

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Overhead Applied to Jobs, Departmental Overhead Rates Xania Inc. uses a normal job-order costing sys...

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