(Solved) Kalp Corporation has two production departments, Machining and Finishing. The company uses a ...

Kalp Corporation has two production departments, Machining and Finishing. 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 Finishing 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	Finishing
Machine-hours	19,000	12,000
Direct labor-hours	2,000	8,000
Total fixed manufacturing overhead cost	$ 136,800	$ 69,600
Variable manufacturing overhead per machine-hour	$ 1.80
Variable manufacturing overhead per direct labor-hour		$ 3.20

During the current month the company started and finished Job K928. The following data were recorded for this job:

Job K928:	Machining	Finishing
Machine-hours	90	10
Direct labor-hours	30	50
Direct materials	$ 775	$ 415
Direct labor cost	$ 630	$ 1,050

The predetermined overhead rate for the Machining Department is closest to:

▸ $7.20 per machine-hour

▸ $9.00 per machine-hour

▸ $21.38 per machine-hour

▸ $1.80 per machine-hour

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Kalp Corporation has two production departments, Machining and Finishing. The company uses a ...

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