Bronzit Company estimated the following at the beginning of the year: Assembly DepartmentTesting DepartmentTotalOverhead$700,000$100,000$800,000Direct Labor Hours150,50040,500191,000Machine Hours37,00072,000109,000Bronzit uses departmental overhead rates. In the assembly department, direct labor hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.Actual data for the month of May is as follows:Assembly DepartmentTesting DepartmentTotalOverhead$50,000$11,000$61,000Direct Labor Hours20,0002,50022,500Machine Hours3,50014,00017,500Bronzit decides to continue using departmental overhead rates. What are the predetermined rates for the Assembly and Testing departments respectively? (Note: Round to two decimal places.) a.Assembly: $5.25 per direct labor hour; Testing: $7.33 per machine hour b.Assembly: $4.65 per direct labor hour; Testing: $1.39 per machine hour c.Assembly: $2.23 per direct labor hour; Testing: $6.15 per direct labor hour d.Assembly: $5.12 per machine hour; Testing: $7.22 per machine hour e.None of these

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Bronzit Company estimated the following at the beginning of the year:

	Assembly Department	Testing Department	Total
Overhead	$700,000	$100,000	$800,000
Direct Labor Hours	150,500	40,500	191,000
Machine Hours	37,000	72,000	109,000

Bronzit uses departmental overhead rates. In the assembly department, direct labor hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.

Actual data for the month of May is as follows:

	Assembly Department	Testing Department	Total
Overhead	$50,000	$11,000	$61,000
Direct Labor Hours	20,000	2,500	22,500
Machine Hours	3,500	14,000	17,500

Bronzit decides to continue using departmental overhead rates. What are the predetermined rates for the Assembly and Testing departments respectively? (Note: Round to two decimal places.)

	a.	Assembly: $5.25 per direct labor hour; Testing: $7.33 per machine hour
	b.	Assembly: $4.65 per direct labor hour; Testing: $1.39 per machine hour
	c.	Assembly: $2.23 per direct labor hour; Testing: $6.15 per direct labor hour
	d.	Assembly: $5.12 per machine hour; Testing: $7.22 per machine hour
	e.	None of these

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