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Swango Corporation has two production departments, Casting and Customizing. The company uses a ...

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Swango Corporation has two production departments, Casting and Customizing. The company uses a ...

Swango 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	19,000	11,000
Direct labor-hours	1,000	8,000
Total fixed manufacturing overhead cost	$ 138,700	$ 86,400
Variable manufacturing overhead per machine-hour	$ 1.60
Variable manufacturing overhead per direct labor-hour		$ 3.00

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

▸ $24,000

▸ $110,400

▸ $86,400

▸ $60,379

Textbook

Introduction to Managerial Accounting: Brewer Edition: 9e

Edition: 9^th

Authors: Brewer, Garrison, Noreen

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