Reference no: EM132509687
verhead Applied to Jobs, Departmental Overhead Rates
Xania Inc. uses a normal job-order costing system. Currently, a plant-wide 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 plant-wide 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 $53,000
Normal activity (machine hours) 15,500 9,800
Required:
Question 1. Compute a predetermined overhead rate for the plant as a whole based on machine hours. Round your answer to two decimal places.
Question 2. Compute predetermined overhead rates for each department using machine hours. (Note: Round to two decimal places, if necessary.)
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