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

Vanliere 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	11,000
Direct labor-hours	3,000	6,000
Total fixed manufacturing overhead cost	$ 138,700	$ 52,800
Variable manufacturing overhead per machine-hour	$ 1.90
Variable manufacturing overhead per direct labor-hour		$ 3.80

During the current month the company started and finished Job A803. The following data were recorded for this job:

Job A803:	Machining	Finishing
Machine-hours	90	20
Direct labor-hours	20	60

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

▸ $8.80 per direct labor-hour

▸ $3.98 per direct labor-hour

▸ $12.60 per direct labor-hour

▸ $3.80 per direct labor-hour

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

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