Reference no: EM13367662

Tanner Bay Inc. has two departments, Assembly and Packaging. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Assembly Department bases its rate on machine hours and the Packaging Department bases its rate on direct labor hours. At the beginning of the year, the company made the following estimates:

Assembly Packaging
Direct labor hours 3,000 4,000
Machine-hours 8,500 9,900
Manufacturing overhead cost $144,500 $172,000
Direct labor cost $89,200 $101,000

Assume also the following data on Job #503 which was started and completed during the year:

Assembly Packaging
Direct labor hours 23 37
Machine-hours 109 142
Materials Requisitioned $8,787 $6,566
Direct labor cost $2,100 $1,990

What is the predetermined overhead rate to be used in each department? Show computations.