Shakespeare company has two departments: cutting and finishing. the company uses a job-order costing system and computes a predetermined overhead rate in 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: cutting finishing direct labor-hours 8,100 75,000 machine-hours 64,500 1,200 total fixed manufacturing overhead cost $370,000 $405,000 variable manufacturing overhead per machine-hour $3.00 - variable manufacturing overhead per direct labor-hour - $3.75 compute the predetermined overhead rate to be used in each department.

The predetermined overhead rate to be used in cutting and the finishing department is $8.73 per hour and $9.15 per hour respectively

Explanation:

The computation of predetermined overhead rate is shown below:

For Cutting department:

Predetermined overhead rate = (Estimated fixed manufacturing Overhead cost ÷ estimated machine hours)  + Variable manufacturing overhead per machine-hour

=  ($370,000 ÷ 64,500 hours)  + $3.00

= $8.73 per hour

For Finishing Department:

Predetermined overhead rate = (Estimated l fixed manufacturing Overhead cost ÷ estimated direct labor hours)  +  Variable manufacturing overhead per direct labor-hour

= ($405,000 ÷ 75,000 hours)  + $3.75

= $9.15 per hour

if you use only 25 for your entertainment and only 200 for the groceries that you really need and take out the 50 per month for the computer then that should be enough