Camm Corporation has two manufacturing departments: Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly TotalEstimated total machine-hours (MHs) 3,000 2,000 5000 Estimated total fixed manufacturing- overhead cost $12,600 $4,600 $17,200 Estimated variable manufacturing- overhead cost per MH $1.70 $2.50 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 Assembly Department is closest to .

$4.80 per MH

Explanation:

Assembly Department predetermined overhead rate:

Estimated fixed manufacturing overhead$4,600  

Estimated variable manufacturing overhead ($2.50 per MH × 2,000 MHs)  5,000  

Estimated total manufacturing overhead cost (a)$9,600  

Estimated total machine-hours (b)  2,000MHs

Departmental predetermined overhead rate (a) ÷ (b)$4.80per MH

Departmental predetermined overhead rate = $4.2 per machine hour,$2.3 per machine hour,$3.44 per machine hour.

Explanation:

Estimated machine hours= 3000 , 2000 , 5000

Fixed manufacturing overhead = 12600 , 4600 , 17200

As we know that:

Predetermined overhead rate = estimated overhead / budgeted machine hours.

                          = 12600/3000 = 4.2

                         =4600 / 2000 = 2.3

                         = 17200/5000 = 3.44