White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate for each department. The Cutting Department bases its rate on machine-hours and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting FinishingDirect labor-hours 7,700 43,000Machine-hours 43,400 1,900Total fixed manufacturing overhead cost $390,000 $496,000Variable manufacturing overhead per machine-hour $2.00 Variable manufacturing overhead per direct labor-hour $3.75Compute the predetermined overhead rate for each department.
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