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NeuroJuice NeuroJuice
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A year ago

Tiff Corporation has two production departments, Casting and Assembly. 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 Assembly 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:

CastingAssembly
Machine-hours17,00010,000
Direct labor-hours1,0005,000
Total fixed manufacturing overhead cost$ 129,200$ 46,500
Variable manufacturing overhead per machine-hour$ 1.80
Variable manufacturing overhead per direct labor-hour$ 3.80

During the current month the company started and finished Job P131. The following data were recorded for this job:

Job P131:CastingAssembly
Machine-hours9020
Direct labor-hours2060

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



▸ $9.40 per machine-hour

▸ $7.60 per machine-hour

▸ $1.80 per machine-hour

▸ $31.96 per machine-hour
Textbook 
Introduction to Managerial Accounting: Brewer Edition: 9e

Introduction to Managerial Accounting: Brewer Edition: 9e


Edition: 9th
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Kmc14Kmc14
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