The Silver Company uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the company made the following estimates:
|
|
Direct labor cost............................
|
$60,000
|
$40,000
|
|
|
Manufacturing overhead...............
|
$90,000
|
$45,000
|
|
|
Direct labor-hours..........................
|
6,000
|
9,000
|
|
|
Machine-hours...............................
|
2,000
|
15,000
|
What predetermined overhead rates would be used in Dept A and Dept B, respectively?show working