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:
|Total fixed manufacturing overhead cost||$||112,000||$||48,000|
|Variable manufacturing overhead per machine-hour||$||2.80|
|Variable manufacturing overhead per direct labor-hour||$||5.60|
During the current month the company started and finished Job T138. The following data were recorded for this job:
The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.)
The amount of overhead applied in the customized department to job T 138 is 1360.00 dollars.
Which is explained below in detail:
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