Blackfoot Softball Glove Company Estimated the Following Yearly Data at the Beginning

question 127

Multiple Choice

Blackfoot Softball Glove Company estimated the following yearly data at the beginning of the year:
Blackfoot uses departmental overhead rates. In the assembly department, direct labour hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.
Actual data for August are as follows:
$$\begin{array} { l r r r } & \text { Assembly Department } & \text { Testing Department } & \text { Total } \\\text { Overhead } & \$ 570,000 & \$ 130,000 & \$ 700,000 \\\text { Direct Labour Hours } & 142,500 & 32,500 & 175,000 \\\text { Machine Hours } & 32,000 & 65,000 & 97,000\end{array}$$ $\begin{array}{rrrr} & \text { Assembly Department } & \text { Testing Department } & \text { Total } \\\text { Overhead } & \$ 42,000 & \$ 12,000 & \$ 54,000\\\text { Direct Labour Hours } & 13,500 & 2,430 & 15,930 \\\text { Machine Hours } & 4,020 & 11,000 & 15,020\end{array}$
-Refer to the Figure.Suppose Blackfoot decides to continue using departmental overhead rates.What are the predetermined rates for the assembly and testing departments,respectively?

• A)assembly: $4 per direct labour hour; testing: $2 per machine hour
• B)assembly: $2 per direct labour hour; testing: $4 per machine hour
• C)assembly: $4 per direct labour hour; testing: $4 per direct labour hour
• D)assembly: $7.22 per machine hour; testing: $7.22 per machine hour

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