Aztec Industries produces bread which goes through two operations, mixing and baking, before it is ready to be packaged. Next year's expected costs and activities are shown below.

-Compute Aztec's departmental overhead rate for the mixing department based on machine hours.
A)$1.50 per MH.
B)$5.00 per MH.
C)$0.75 per MH.
D)$0.50 per MH.
E)$2.08 per MH.

Question

Aztec Industries produces bread which goes through two operations, mixing and baking, before it is ready to be packaged. Next year's expected costs and activities are shown below.

-Compute Aztec's departmental overhead rate for the mixing department based on machine hours.
A)$1.50 per MH. 
B)$5.00 per MH. 
C)$0.75 per MH. 
D)$0.50 per MH. 
E)$2.08 per MH.

Quizplus · Accepted Answer

Departmental overhead rate for mixing department = (Budgeted overhead cost for mixing department) / (Budgeted machine hours for mixing department)
= $18,000 / 24,000 MH
= $0.75 per MH.

Aztec Industries Produces Bread Which Goes Through Two Operations, Mixing