Tiff Corporation Has Two Production Departments, Casting and Assembly

Multiple Choice

Tiff Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: During the current month the company started and finished Job P131. The following data were recorded for this job:
The predetermined overhead rate for the Casting Department is closest to:

A) $9.40 per machine-hour
B) $7.60 per machine-hour
C) $1.80 per machine-hour
D) $31.96 per machine-hour