Well Tool, Inc., a manufacturer of welding tools, divided its manufacturing process into two Departments...
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Accounting
Well Tool, Inc., a manufacturer of welding tools, divided its manufacturing process into two Departments - Machining and Finishing. The estimated overhead costs for the Machining and Finishing Departments were $800,000 and $8,760,000 respectively. The company produces two types of tools - Standard and Deluxe. The Machining Department is mechanized, whereas the Finishing Department is labor oriented. Calculate the department predetermined overhead allocation rate for the Machining Department using machine hours as the allocation base. (Round answer to the nearest cent.)
Machining
Finishing
Estimated Machine hours
Estimated Labor hours
Standard
2500
2400
Deluxe
1800
2300
Totals
4300
4700
$1863.83
$186.05
$204.88
$2223.26
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