Estimated total manufacturing overhead

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Question - 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 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:

Machining Customizing

Machine-hours  24,000 25,000

Direct labor-hours  20,000  7,000

Total fixed manufacturing overhead cost $79,200 $31,500

Variable manufacturing overhead per machine-hour $2.00 

Variable manufacturing overhead per direct labor-hour   $3.50

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  70  40

Direct labor-hours  60  20

The estimated total manufacturing overhead for the Machining Department is closest to:

  • $127,200
  • $79,200
  • $48,000
  • $129,200

Reference no: EM131578140

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