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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
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: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine- hour Variable manufacturing overhead per direct labor-hour Casting 23,000 Customizing 21,000 15,000 $89,700 2,000 $ 6,200 $ 1.50 $ 4.10 The estimated total manufacturing overhead for the Customizing Department is closest to:
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