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: MachiningCustomizingMachine-hours 25,000 16,000Direct labor-hours 3,000 8,000Total fixed manufacturing overhead cost$100,000$32,000Variable manufacturing overhead per machine-hour$1.50 Variable manufacturing overhead per direct labor-hour $3.50 During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272:MachiningCustomizingMachine-hours 30 40Direct labor-hours 20 40 The estimated total manufacturing overhead for the Machining Department is closest to:rev: 02_12_2018_QC_CS-117862 Multiple Choice $137,500 $100,000 $37,500 $124,000

Formula: Predetermined overhead rate = Estimated manufacturing overhead / estimated machine hours…

Answered: Eisentrout Corporation has two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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		25,000		16,000
Direct labor-hours		3,000		8,000
Total fixed manufacturing overhead cost	$	100,000	$	32,000
Variable manufacturing overhead per machine-hour	$	1.50
Variable manufacturing overhead per direct labor-hour			$	3.50

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		30	40
Direct labor-hours		20	40

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

rev: 02_12_2018_QC_CS-117862

Multiple Choice

$137,500
$100,000
$37,500
$124,000

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