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: FormingAssemblyTotalEstimated total machine-hours (MHs) 5,000 5,000 10,000Estimated total fixed manufacturing overhead cost$28,000$10,500$38,500Estimated variable manufacturing overhead cost per MH$1.80$2.60  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: Job BJob LForming machine-hours 3,400 1,600Assembly machine-hours 2,000 3,000Assume 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. $1.80
C. $7.40
D. $6.05


Answer: C

Business

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