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Required information [The following information applies to the questions displayed below.] Aztec Industries produces bread which...

Required information

[The following information applies to the questions displayed below.]

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.

Mixing Baking
Direct labor hours 417,000 DLH 97,000 DLH
Machine hours 817,000 MH 817,000 MH
Overhead costs $ 750,600 $ 417,000

Compute Aztec's departmental overhead rate for the mixing department based on machine hours.

  • $0.92 per MH.

  • $4.30 per MH.

  • $1.80 per MH.

  • $2.27 per MH.

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ReportAnswer #1

Departmental overhead rate = Overhead costs / Machine hours

= 750,600 / 817000

= 0.92

The correct option is $0.92 per MH.

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