Mahon Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Casting | Customizing | |||
Machine-hours | 19,200 | 17,200 | ||
Direct labor-hours | 7,600 | 8,600 | ||
Total fixed manufacturing overhead cost | $ | 117,120 | $ | 86,000 |
Variable manufacturing overhead per machine-hour | $ | 1.80 | ||
Variable manufacturing overhead per direct labor-hour | $ | 3.60 | ||
During the current month the company started and finished Job T138. The following data were recorded for this job:
Job T138: | Casting | Customizing | |
Machine-hours | 70 | 40 | |
Direct labor-hours | 14 | 60 | |
The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.)
Ans-
Customizing Department's predetermined overhead rate | 86,000/8,600 | 10 |
Overhead applied to job | ||
Variable Manufacturing Overhead Applied | 3.60*60 | 216 |
Fixed Manufacturing Overhead Applied | 10*60 | 600 |
816 (216+600) |
The correct answer is $816.
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Mahon Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system...
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