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: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine- hour Variable manufacturing overhead per direct labor-hour Job T272: Machine-hours Direct labor-hours Machining 28,000 4,000 $86,800 $ 1.50 Machining 70 20 During the current month the company started and finished Job T272. The following data were recorded for this job: Customizing 20 30 Customizing 11,000 3,000 $12,000 The estimated total manufacturing overhead for the Machining Department is closest to: $ 4.70
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: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine- hour Variable manufacturing overhead per direct labor-hour Job T272: Machine-hours Direct labor-hours Machining 28,000 4,000 $86,800 $ 1.50 Machining 70 20 During the current month the company started and finished Job T272. The following data were recorded for this job: Customizing 20 30 Customizing 11,000 3,000 $12,000 The estimated total manufacturing overhead for the Machining Department is closest to: $ 4.70
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Eisentrout Corporation has two production departments, Machining and Customizing. 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 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:
Machine-hours
Direct labor-hours
Total fixed manufacturing overhead cost
Variable manufacturing overhead per machine-
hour
Variable manufacturing overhead per direct
labor-hour
Job T272:
Machine-hours
Direct labor-hours
Machining
28,000
4,000
$86,800
$ 1.50
During the current month the company started and finished Job T272. The following data were recorded for this job:
Machining
70
20
Customizing
20
30
Customizing
11,000
3,000
$12,000
The estimated total manufacturing overhead for the Machining Department is closest to:
$ 4.70
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