Hatchett Inc

question 58

Multiple Choice

Hatchett Inc.produces joint products L,M,and N from a joint process.Information concerning a batch produced in May at a joint cost of $75,000 was as follows:
The amount of joint costs allocated to product M using the net realizable value method is (calculate all ratios and percentages to 4 decimal places,for example 33.3333%,and round all dollar amounts to the nearest whole dollar) :

• A)$3,614.
• B)$11,250.
• C)$40,312.
• D)$33,434.
• E)$37,952.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to products, calculated before the period begins based on estimated costs and activity levels.

Machine-Hours

The total hours that a machine is operational, used as a measure for allocating manufacturing overhead costs.

Plantwide Predetermined

A method that assigns overhead costs to products based on a single predetermined overhead rate for the entire factory or plant.

Manufacturing Overhead

Refers to all the indirect costs associated with the production process, excluding direct materials and direct labor costs.