Info in imagesAnswer Choices for Q1a. $104,000b. $33,600 c. $310,933 d. $137,600Answer Choices for Q2a. $54,110b. $98,700 c. $68,600 d. $30,100 Garza Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead ratein each production department. The Casting Department's predetermined overhead rate is based on machine-hours and the Customizing Department's predeterminedoverhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:CastingCustomizingMachine-hours20,00013,000Direct labor-hours1,0007,000$152,000$68,600Total fixed manufacturing overhead costVariable manufacturing overhead per machine-hourVariable manufacturing overhead per direct labor-hour$ 2.10$ 4.30The estimated total manufacturing overhead for the Customizing Department is closest to: Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predeterminedoverhead rate in each production department. The Machining Department's predetermined overhead rate is based on machine-hours and the Customizing Department'spredetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates:Machining CustomizingMachine-hours16,00011,000Direct labor-hours2,0006,000$104,000$ 2.10$56,400Total fixed manufacturing overhead costVariable manufacturing overhead per machine-hourVariable manufacturing overhead per direct labor-hour$ 3.30During the current month the company started and finished Job T272. The following data were recorded for this job:Job T272:Machining CustomizingMachine-hours6030Direct labor-hours1060The estimated total manufacturing overhead for the Machining Department is closest to:

Answered: Eisentrout Corporation has two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Info in images

Answer Choices for Q1

a. $104,000

b. $33,600

c. $310,933

d. $137,600

Answer Choices for Q2

a. $54,110

b. $98,700

c. $68,600

d. $30,100

Garza 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
20,000
13,000
Direct labor-hours
1,000
7,000
$152,000
$68,600
Total fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
$ 2.10
$ 4.30
The estimated total manufacturing overhead for the Customizing Department is closest to:

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:
Machining Customizing
Machine-hours
16,000
11,000
Direct labor-hours
2,000
6,000
$104,000
$ 2.10
$56,400
Total fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
$ 3.30
During the current month the company started and finished Job T272. The following data were recorded for this job:
Job T272:
Machining Customizing
Machine-hours
60
30
Direct labor-hours
10
60
The estimated total manufacturing overhead for the Machining Department is closest to:

Expert Solution

Part-1

Total fixed manufacturing overhead cost for Machining Department = $104,000

Variable manufacturing overhead per machine-hour = $2.10

Total machine hours for Machining Department = 16,000 hours

$\begin{array}{rcl} Total variable manufacturing overhead & = & Variable manufacturing overhead rate \times Total machine hours \\ = & $ 2.10 \times 16, 000 \\ = & $ 33, 600 \end{array}$

$\begin{array}{rcl} Total manufacturing overhead (Machining Department) & = & Total fixed manufacturing overhead + Total variable manufacturing overhead \\ = & $ 104, 000 + $ 33, 600 \\ = & $ 137, 600 \end{array}$

Thus, the correct answer is Option D - $137,600

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