Question
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 Customizing 20,400 16,400 7,100 8,200 $ 157,080 $ 68,880 $1.50 $ 3.00 During the current month the company started and finished Job T138. The following data were recorded for this job: Job T138: Machine-hours Casting Customizing 60 50 90 Direct labor-hours 10 The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.) $720.00 $93,480.00 $360.00 $1,026.00
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