Base Runner, Inc (A) Compute a Departmental Overhead Rate for the Cutting Department

question 43

Essay

Base Runner, Inc. manufactures baseball bats which go through two operations, cutting and sanding, before they are complete. Expected costs and activities for the two departments are shown below.
$$\begin{array} { | l | c | c | } \hline & \text { Cutting } & \text { Sanding } \\\hline \text { Direct labor hours } & 50,000 \mathrm { DLH } & 5,000 \mathrm { DLH } \\\hline \text { Machine hours } & 25,000 \mathrm { MH } & 50,000 \mathrm { MH } \\\hline \text { Overhead costs } & \$ 50,000 & \$ 37,500 \\\hline\end{array}$$
(a.) Compute a departmental overhead rate for the cutting department based on machine hours.
(b.) Compute a departmental overhead rate for the sanding department based on machine hours.

---

Definitions:

Related Goods

Products or services that are either complements or substitutes to one another, affecting each other's demand and supply.

Cost of Resources

The total expense incurred to acquire resources needed for production, including raw materials, labor, and capital.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a specified period.

Demand

The volume of goods or services consumers are prepared and able to buy across a range of prices within a certain timeframe.