Figure 4-6 The Fast & Furious Company Produces Two Products: Toy Planes

Multiple Choice

Figure 4-6
The Fast & Furious Company produces two products: toy planes and toy race cars. They use departmental overhead rates for the two production departments: molding and finishing. Molding uses machine hours to assign overhead and Finishing uses direct labor hours. 50,000 planes and 250,000 race cars are produced. Please find the following data:

-Lamar Corporation uses departmental manufacturing overhead rates to apply overhead. Direct labor cost is used to apply manufacturing overhead in Department A and machine hours are used for Department B. What predetermined overhead rate would be used for departments A and B respectively?

A) 83%; $5
B) 83%; $3
C) 120%; $4
D) $8.40; $5