The Watts Company Uses Predetermined Overhead Rates to Apply Manufacturing

question 5

Multiple Choice

The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs.The predetermined overhead rate is based on labour cost in Dept.A and on machine hours in Dept.B.At the beginning of the year,the company made the following estimates: What predetermined overhead rates would be used in Dept A and Dept B,respectively?

• A) 50% and $8.00.
• B) 50% and $5.00.
• C) 110% and $15.00.
• D) 200% and $5.00.

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