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
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 Departments predetermined overhead rate is based on machine-hours and the Customizing Departments predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Machining | Customizing | |
---|---|---|
Machine-hours | 16,000 | 11,000 |
Direct labor-hours | 2,000 | 6,000 |
Total fixed manufacturing overhead cost | $104,000 | $56,400 |
Variable manufacturing overhead per machine-hour | $ 2.10 | |
Variable manufacturing overhead per direct labor-hour | $ 3.30 |
During the current month the company started and finished Job T272. The following data were recorded for this job:
Job T272: | Machining | Customizing |
---|---|---|
Machine-hours | 60 | 30 |
Direct labor-hours | 10 | 60 |
The amount of overhead applied in the Customizing Department to Job T272 is closest to: (Round your intermediate calculations to 2 decimal places.)
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