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Duck Company has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production
Duck Company 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: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Casting 19,200 7,600 $117,120 $ 1.80 Customizing 17,200 8,600 $86,000 $ 3.60 During the current month the company started and finished Job T138. The following data were recorded for this job: Job T138: Machine-hours Direct labor-hours Casting Customizing 40 14 60 The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $816.00 $688.00 $344.00 $344.00 $116,960.00
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