Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Departmentâs predetermined overhead rate is based on machine-hours and the Customizing Departmentâs predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Machining Customizing Machine-hours 16,000 11,000 Direct labor-hours 2,000 6,000 Total fixed manufacturing overhead cost $ 104,000 $ 56,400 Variable manufacturing overhead per machine-hour $ 2.10 Variable manufacturing overhead per direct labor-hour $ 3.30
During the current month the company started and finished Job T272. The following data were recorded for this job:
Job T272: Machining Customizing Machine-hours 60 30 Direct labor-hours 10 60
The predetermined overhead rate for the Machining Department is closest to:
Multiple Choice
$22.93 per machine-hour
$6.50 per machine-hour
$2.10 per machine-hour
$8.60 per machine-hour
Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Departmentâs predetermined overhead rate is based on machine-hours and the Customizing Departmentâs predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:
Machining | Customizing | |||||
Machine-hours | 16,000 | 11,000 | ||||
Direct labor-hours | 2,000 | 6,000 | ||||
Total fixed manufacturing overhead cost | $ | 104,000 | $ | 56,400 | ||
Variable manufacturing overhead per machine-hour | $ | 2.10 | ||||
Variable manufacturing overhead per direct labor-hour | $ | 3.30 | ||||
During the current month the company started and finished Job T272. The following data were recorded for this job:
Job T272: | Machining | Customizing | ||||
Machine-hours | 60 | 30 | ||||
Direct labor-hours | 10 | 60 | ||||
The predetermined overhead rate for the Machining Department is closest to:
Multiple Choice
$22.93 per machine-hour
$6.50 per machine-hour
$2.10 per machine-hour
$8.60 per machine-hour