Question - Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining 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:
Machining Customizing
Machine-hours 24,000 25,000
Direct labor-hours 20,000 7,000
Total fixed manufacturing overhead cost $79,200 $31,500
Variable manufacturing overhead per machine-hour $2.00
Variable manufacturing overhead per direct labor-hour $3.50
During the current month the company started and finished Job T272. The following data were recorded for this job:
Job T272:
Machining Customizing
Machine-hours 70 40
Direct labor-hours 60 20
The estimated total manufacturing overhead for the Machining Department is closest to:
- $127,200
- $79,200
- $48,000
- $129,200