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Mahon corporation has two production departments, casting and customizing . The company uses a job order costing system and computes a predetermined overhead rate in
- Mahon 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 predetermine 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
Casting
customizing
Direct labor hours
17,800
13,800
Total fixed manufacturing overhead cost
5,800
6,900
Variable manufacturing overhead per machine hour
$122,820
$75,900
Variable manufacturing overhead per direct labor hour
$2.50
$4.90
Machine hours | Casting | customizing |
Direct labor hours | 17,800 | 13,800 |
Total fixed manufacturing overhead cost | 5,800 | 6,900 |
Variable manufacturing overhead per machine hour | $122,820 | $75,900 |
Variable manufacturing overhead per direct labor hour | $2.50 | $4.90 |
During the current month the company started and finished job T138. The following data were recorded for this job.
Job T138: | Casting | Customizing |
Machine hours | 60 | 40 |
Direct labor hours | 9 | 60 |
The amount of overhead applied in the customizing department to job T138 is closed to:
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