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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
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 cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Casting 19,400 6,500 $120,280 Customizing 15,400 7,700 $81,620 $ 1.80 $ 3.50 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 Customizing 80 60 15 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 $1,056.00 $108,570.00 $1,128.00 $528.00
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