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Petty Corporation has two production departments, Milling and Finishing. The company uses a ...

Petty Corporation has two production departments, Milling and Finishing. 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 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:

	Milling	Finishing
Machine-hours	20,000	14,000
Direct labor-hours	2,000	8,000
Total fixed manufacturing overhead cost	$ 148,000	$ 88,000
Variable manufacturing overhead per machine-hour	$ 1.90
Variable manufacturing overhead per direct labor-hour		$ 3.60

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

▸ $408,000

▸ $38,000

▸ $148,000

▸ $186,000

Textbook

Introduction to Managerial Accounting: Brewer Edition: 9e

Edition: 9^th

Authors: Brewer, Garrison, Noreen

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