Answer:
Option (C) is correct.
Explanation:
For Machining department,
Manufacturing overhead rate:
= Estimated Overhead cost ÷ Amount of allocation base
= [$1,000,000 ÷ (130,000 + 70,000) machine hours]
= $1,000,000 ÷ 200,000 machine hours
= $5.00 per machine hour
For Finishing department,
Manufacturing overhead rate:
= Estimated Overhead cost ÷ Amount of allocation base
= [$100,000 ÷ (9,000 + 71,000) direct labor hours]
= $100,000 ÷ 80,000 direct labor hours
= $1.25 per labor hour
