Garza 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: The predetermined overhead rate for the Casting Department is closest to:
A) $9.70 per machine-hour
B) $7.60 per machine-hour
C) $2.10 per machine-hour
D) $27.71 per machine-hour

Question

Garza 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:  The predetermined overhead rate for the Casting Department is closest to:
A) $9.70 per machine-hour 
B) $7.60 per machine-hour 
C) $2.10 per machine-hour 
D) $27.71 per machine-hour

Quizplus · Accepted Answer

The Answer of Garza 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:  The predetermined overhead rate for the Casting Department is closest to:
A) $9.70 per machine-hour 
B) $7.60 per machine-hour 
C) $2.10 per machine-hour 
D) $27.71 per machine-hour

Garza Corporation Has Two Production Departments, Casting and Customizing