Merati Corporation Has Two Manufacturing Departments--Forming and Assembly

Multiple Choice

Merati Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: During the most recent month, the company started and completed two jobs--Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow:
Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Forming Department is closest to:

A) $5.60
B) $7.40
C) $1.80
D) $6.05