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: During the current month the company started and finished Job T272. The following data were recorded for this job:
The estimated total manufacturing overhead for the Customizing Department is closest to:

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:  During the current month the company started and finished Job T272. The following data were recorded for this job:
 The estimated total manufacturing overhead for the Customizing Department is closest to:

Quizplus · Accepted Answer

Customizing Department overhead cost = Fixed manufacturing overhead cost + (Variable overhead cost per direct labor-hour × Total direct labor-hours in the department)
= $56,400 + ($3.30 per direct labor-hour × 6,000 direct labor-hours)
= $56,400 + $19,800 = $76,200

Eisentrout Corporation Has Two Production Departments, Machining and Customizing