Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.The departmental predetermined overhead rate in the Forming Department is closest to:

A) $5.60
B) $7.40
C) $1.80
D) $6.05

Departmental Predetermined Overhead Rates

The overhead rates assigned to specific departments based on estimated costs and activity levels, used for allocating overhead to products.

Machine-Hours

A measure of the amount of time a machine is operated in a given period, often used in manufacturing to allocate costs or set production schedules.

Forming Department

A specific section within a production facility where raw materials are shaped or configured into their product form.