Question
Tiff Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production
Tiff Corporation has two production departments, Casting and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Departments predetermined overhead rate is based on machine-hours and the Assembly Departments predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Casting | Assembly | |
---|---|---|
Machine-hours | 17,000 | 10,000 |
Direct labor-hours | 1,000 | 5,000 |
Total fixed manufacturing overhead cost | $ 129,200 | $ 46,500 |
Variable manufacturing overhead per machine-hour | $ 1.80 | |
Variable manufacturing overhead per direct labor-hour | $ 3.80 |
During the current month the company started and finished Job P131. The following data were recorded for this job:
Job P131: | Casting | Assembly |
---|---|---|
Machine-hours | 90 | 20 |
Direct labor-hours | 20 | 60 |
The predetermined overhead rate for the Casting Department is closest to:
Multiple Choice
$9.40 per machine-hour
$31.96 per machine-hour
$7.60 per machine-hour
$1.80 per machine-hour
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