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soldier1979 [14.2K]
3 years ago
14

A department that is capital-intensive most likely would use a predetermined departmental overhead rate based on which of the fo

llowing activity bases?
a. units of direct material used
b. direct labor hours
c. direct labor cost
d. machine hours
Business
1 answer:
JulijaS [17]3 years ago
8 0

Answer:

D)machine hours

Explanation:

It should be noted that department that is capital-intensive most likely would use a predetermined departmental overhead rate based on

machine hours.

A machine-hour can be regarded as measurement that is been used in applying factory overhead to manufactured goods. It's application is usually found in machine-intensive environments, environment whereby the amount of time that is expelled on processing by a machine is been regarded as largest activity that overhead allocations can be said to have based upon. Machine hour rate can be gotten by making division of the total running expenses of a machine by estimated number of hours for the machine to work at a specific period

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<em>Note : Blowing Sand has "enough excess capacity" this means that fixed cost will be the same in the range or they will be ocurred whether or not the special order is accepted.</em>

Therefore fixed costs are Irrelevant for this decision.

<u>Incremental Costs and Revenues - accept the special order</u>

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<em>Less</em> Variable Costs ( 10,000 units × $17each)         ($170,000)

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