Question
Walsh Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each
Walsh Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling 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: Milling Customizing Machine-hours Direct labor-hours Total fixed manufacturing overhead cost 17,000 13,000 2,000 5,000 $ 119,000 $ 42,000 Variable manufacturing overhead per machine-hour $ 1.60 Variable manufacturing overhead per direct labor-hour $ 4.30 During the current month the company started and finished Job A492. The following data were recorded for this job: Job A492: Milling Customizing Machine-hours Direct labor-hours 90 20 20 50 The amount of overhead applied in the Milling Department to Job A492 is closest to: Select one: a. $756.00 O b. $144.00 c. $774.00 O d. $146,200.00
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