Barbeau Corporation has two production departments, Milling and Customizing. The company uses a job-order costing...
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Accounting
Barbeau 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:
MillingCustomizingMachine-hours 17,000 13,000Direct labor-hours 2,000 5,000Total fixed manufacturing overhead cost$119,000$42,000Variable manufacturing overhead per machine-hour$1.60Variable 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:MillingCustomizingMachine-hours 90 20Direct labor-hours 20 50The estimated total manufacturing overhead for the Customizing Department is closest to:
$63,500
$42,000
$33,853
$21,500
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