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Asked by Rebecca Lovato on Jul 13, 2024

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Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing 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: Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing 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 K928. The following data were recorded for this job: The predetermined overhead rate for the Machining Department is closest to: A) $7.20 per machine-hour B) $9.00 per machine-hour C) $21.38 per machine-hour D) $1.80 per machine-hour During the current month the company started and finished Job K928. The following data were recorded for this job:
Kalp Corporation has two production departments, Machining and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Finishing 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 K928. The following data were recorded for this job: The predetermined overhead rate for the Machining Department is closest to: A) $7.20 per machine-hour B) $9.00 per machine-hour C) $21.38 per machine-hour D) $1.80 per machine-hour The predetermined overhead rate for the Machining Department is closest to:

A) $7.20 per machine-hour
B) $9.00 per machine-hour
C) $21.38 per machine-hour
D) $1.80 per machine-hour

Machining Department

A specific division within a manufacturing plant where machining, a process of shaping metal or other materials, is carried out.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate indirect costs to products or services based on a consistent activity measure.

Machine-Hours

A measure of production volume that records the number of hours machinery is in operation.

  • Compute specific overhead rates for various manufacturing sections.
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TA
Tasha AndersonJul 16, 2024
Final Answer :
B
Explanation :
To calculate the predetermined overhead rate for the Machining Department, we need to divide the estimated total overhead costs for the department by the estimated total machine-hours for the year.

Predetermined overhead rate for Machining Department = Estimated total overhead costs / Estimated total machine-hours
Predetermined overhead rate for Machining Department = $190,000 / 21,000 machine-hours
Predetermined overhead rate for Machining Department = $9.00 per machine-hour

Therefore, choice B is the closest to the answer.

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