Answer the Following Questions Using the Information Below:
Bauer Manufacturing

question 59

Multiple Choice

Answer the following questions using the information below:
Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20X3, the following estimates were provided for the coming year:
$\begin{array}{lrr}&\text { Machining }&\text { Assembly }\\\text { Direct labor-hours } & 30,000 & 60,000 \\\text { Machine-hours } & 80,000 & 20,000 \\\text { Direct labor cost } & \$ 500,000 & \$ 900,000 \\\text { Manufacturing overhead costs } & \$ 420,000 & \$ 240,000\end{array}$ The accounting records of the company show the following data for Job #316:
$$\begin{array} { l r r } & \text { Machining } & \text { Assembly } \\\text { Direct labor-hours } & 120 & 70 \\\text { Machine-hours } & 60 & 5 \\\text { Direct material cost } & \$ 300 & \$ 200 \\\text { Direct labor cost } & \$ 100 & \$ 400\end{array}$$
-For Bauer Manufacturing,what is the annual manufacturing overhead cost-allocation rate for the Machining Department?

• A) $4.00
• B) $4.20
• C) $4.67
• D) $5.25

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Definitions:

Changes

Alterations or modifications in circumstances, conditions, environments, or performances.

Concentration

A growth strategy to expand within the same business area.

Growth

The process of increasing in physical size, capacity, production, or the comprehensive development of entities.

Primary Business

The central, key, or main area of business focus or activity for a company.