Mahon Corporation has two production departments, Casting and Customizing. The c

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 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 Casting Customizing Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 18,000 2,000 $124,200 $1.90 14,000 7,000 $68,600 $ 3.80 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 70 10 30 60 The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.)

Explanation / Answer

Answer

particulars amount total

Customizing Department’s predetermined overhead rate 68600/7000 9.8 Overhead applied to job Variable manufacturing OH applied 3.8*60 228 Fixed manufacturing OH applied 9.8*60 588 228+588 816 the amount of overhead applied = 816

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