Merati Corporation Has Two Manufacturing Departments--Forming and Assembly

question 12

Multiple Choice

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:
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:

-Assume 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) $7.40
• C) $1.80
• D) $6.05

---

Definitions:

Subsequent Depreciation

The allocation of an asset's cost over its useful life, considering any adjustments made following the asset's initial measurement and recognition.

Revaluation Method

A method used to adjust the carrying value of an asset to its current market value on the balance sheet.

IFRS

The International Financial Reporting Standards (IFRS) provide a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.

Asset Exchange Transaction

A transaction where one asset is given up in exchange for another asset, with both having a measurable fair value.