Garza Corporation has two production departments, Casting and Customizing. The company uses a job-order costing...
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Accounting
Garza 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 26,000 24,000 Direct labor-hours 15,000 10,000 Total fixed manufacturing overhead cost $ 140,400 $ 41,000 Variable manufacturing overhead per machine-hour $ 1.80 Variable manufacturing overhead per direct labor-hour $ 4.60 The estimated total manufacturing overhead for the Customizing Department is closest to: $46,000 $209,400 $87,000 $41,000
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