tasty pastry produces donuts which go through two operations, mixing and baking, before they are ready to be…

tasty pastry produces donuts which go through two operations, mixing and baking, before they are ready to be packaged. next years expected costs activities are shown below.\ndirect labor hours machine hours overhead costs\nmixing 300,000 dlh 1,000,000 mh $510,000\nbaking 70,000 dlh 800,000 mh $400,000\ncompute tastys departmental overhead rate for the mixing department based on machine hours.\nmultiple choice\n$3.33 per mh.\n$0.60 per mh.\n$0.51 per mh.\n$2.00 per mh.

tasty pastry produces donuts which go through two operations, mixing and baking, before they are ready to be packaged. next years expected costs activities are shown below.\ndirect labor hours machine hours overhead costs\nmixing 300,000 dlh 1,000,000 mh $510,000\nbaking 70,000 dlh 800,000 mh $400,000\ncompute tastys departmental overhead rate for the mixing department based on machine hours.\nmultiple choice\n$3.33 per mh.\n$0.60 per mh.\n$0.51 per mh.\n$2.00 per mh.

Answer

Explanation:

Step1: Recall overhead - rate formula

The formula for the departmental overhead rate is $\text{Overhead Rate}=\frac{\text{Total Overhead Costs}}{\text{Total Activity Base}}$.

Step2: Identify values for mixing department

For the mixing department, the total overhead costs are $$510,000$ and the machine - hours (activity base) are $1,000,000$ MH.

Step3: Calculate the overhead rate

$\text{Overhead Rate}=\frac{510000}{1000000}= 0.51$ dollars per MH.

Answer:

$0.51$ per MH, so the correct option is $$0.51$ per MH.