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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 each production
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 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 coat Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Casting Customizing 14,600 12,600 5,200 6,300 $116,800 $49,770 $ 1.60 $ 3.10 During the current month the company started and finished Job T138. The following data were recorded for this job: Job T138: Machine-hours Direct labor-hours Casting 70 14 Customizing 40 80 The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $564.00 $69,300.00 O $880.00 $282.00
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