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
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 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:
| Casting | Customizing | |||
| Machine-hours | 26,000 | 14,000 | ||
| Direct labor-hours | 16,000 | 8,000 | ||
| Total fixed manufacturing overhead cost | $ | 114,400 | $ | 44,800 |
| Variable manufacturing overhead per machine-hour | $ | 1.90 | ||
| Variable manufacturing overhead per direct labor-hour | $ | 4.30
| ||
| Casting | Customizing | |||||
| Machine-hours | 26,000 | 14,000 | ||||
| Direct labor-hours | 16,000 | 8,000 | ||||
| Total fixed manufacturing overhead cost | $ | 114,400 | $ | 44,800 | ||
| Variable manufacturing overhead per machine-hour | $ | 1.90 | ||||
| Variable manufacturing overhead per direct labor-hour | $ | 4.30 | ||||
The estimated total manufacturing overhead for the Customizing Department is closest to?
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Fundamental Accounting Principles Volume II
Authors: Larson Kermit, Jensen Tilly
14th Canadian Edition
71051570, 0-07-105150-3, 978-0071051576, 978-0-07-10515, 978-1259066511
