[The following information applies to the questions displayed below.]Wall Nuts, Inc. produces paneling that requires two processes, A and B, to complete. Oak is the best-selling of all the many types of paneling produced. Information related to the 40,000 units of oak paneling produced annually is shown in the following table:Direct materials$380,000 Direct labor Department A (6,000 DLH × $25 per DLH)$150,000 Department B (35,125 DLH × $16 per DLH)$562,000 Machine Hours Department A 24,000MHDepartment B 32,000MH Wall Nuts' total expected overhead costs and related overhead data are shown below. Department ADepartment BDirect labor hours 67,000DLH 170,000DLHMachine hours 100,000MH 80,000MHManufacturing overhead costs$450,000 $600,000 Use the data for Wall Nuts,
Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.
A. $7.50 per MH in Dept. A; $7.50 per MH in Dept. B.
B. $4.50 per MH in Dept. A; $4.50 per MH in Dept. B.
C. $2.70 per MH in Dept. A; $6.00 per MH in Dept. B.
D. $4.50 per MH in Dept. A; $7.50 per MH in Dept. B.
E. $0.60 per MH in Dept. A; $0.80 per MH in Dept. B.
Answer: D
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