Fatzinger Corporation Has Two Production Departments, Milling and Assembly

Multiple Choice

Fatzinger Corporation has two production departments, Milling and Assembly.The company uses a job-order costing system and computes a predetermined overhead rate in each production department.The Milling 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: The predetermined overhead rate for the Assembly Department is closest to:

A) $8.20 per direct labor-hour
B) $3.40 per direct labor-hour
C) $4.06 per direct labor-hour
D) $11.60 per direct labor-hour