Question
Company AA has two production departments, Machining and Finishing. They use Job-Order-Costing system and compute a predetermined overhead rate in each department. The machining department
Company AA has two production departments, Machining and Finishing. They use Job-Order-Costing system and compute a predetermined overhead rate in each department. The machining department bases its overhead rate on machine hours and the Finishing department bases it on direct labor hours. The company has the following estimates at the beginning of the year:
| Machine | Finishing |
Machine hours | 18,000 | 11,000 |
Direct labor hours | 2000 | 9000 |
Total fixed manu. overhead | $102,600 | $96,300 |
Variable manu. Overhead per machine hour | 2.1 |
|
Variable overhead per direct labor hour |
| $3.90 |
During the month, the company finished Job K344. The following data was recorded for the job:
Job K344: machining finishing
Machine hours 80 30
Direct labor hours 20 40
The amount of overhead applied in the machining department for job K344 is closest to:
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