Assume that a company uses direct labor hours as its allocation base for its production departments, A and B. Both departments use 20,000 direct labor hours. Budgeted factory overhead costs are $2,060,000 for Department A and $1,140,000 for Department B. What is the production department factory overhead rate for each department?
a. $57 and $103, respectively, per machine hour
b. $80 per machine hour for both departments
c. $160 per machine hour for both departments
d. $103 and $57, respectively, per machine hour
d
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