A company produces computer chips that go through two operations, operation A1 and operation B2, before they are complete. Expected costs and activities for the two departments are shown below. Departmental overhead rates are based on machine hours in department A1 and direct labor hours in department B2. Therefore, the overhead rates for department A1 and department B2 are $3.62 per machine hour and $5.73 per direct labor hour, respectively.

	Department A1	Department B2
Machine hours	40,000 MH	30,000 MH
Direct labor hours	36,200 DLH	28,650 DLH
Overhead costs	$144,800	$171,900

True

False