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 13,000 29,000
Direct labor-hours 19,000 5,000
Total fixed manufacturing overhead cost $ 68,900 $ 20,500
Variable manufacturing overhead per machine-hour $ 1.00
Variable manufacturing overhead per direct labor-hour $ 4.20
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 30 40
Direct labor-hours 40 50
The estimated total manufacturing overhead for the Machining Department is closest to:

Multiple Choice
A. $68,900
B. $81,900
C. $97,900
D. $13,000

Answer 1

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