Question
Kroeker Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production
Kroeker Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling 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:
Milling | Customizing | |||||
Machine-hours | 17,000 | 12,000 | ||||
Direct labor-hours | 1,000 | 9,000 | ||||
Total fixed manufacturing overhead cost | $ | 112,200 | $ | 81,000 | ||
Variable manufacturing overhead per machine-hour | $ | 1.70 | ||||
Variable manufacturing overhead per direct labor-hour | $ | 4.30 | ||||
During the current month the company started and finished Job T898. The following data were recorded for this job:
Job T898: | Milling | Customizing | ||||
Machine-hours | 80 | 30 | ||||
Direct labor-hours | 20 | 50 | ||||
The amount of overhead applied in the Customizing Department to Job T898 is closest to:
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