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 1,000 $ 152,000 $ 2.10 Direct labor-hours 7,000 Total fixed manufacturing overhead cost $ 68,600 Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour $ 4.30 The predetermined overhead rate for the Casting Department is closest to: Multiple Choice $2.10 per machine-hour $7.60 per machine-hour $27.71 per machine-hour $9.70 per machine-hour

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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
1,000
$ 152,000
$ 2.10
Direct labor-hours
7,000
Total fixed manufacturing overhead cost
$ 68,600
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
$ 4.30
The predetermined overhead rate for the Casting Department is closest to:
Multiple Choice
$2.10 per machine-hour
$7.60 per machine-hour
$27.71 per machine-hour
$9.70 per machine-hour
Transcribed Image Text: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 1,000 $ 152,000 $ 2.10 Direct labor-hours 7,000 Total fixed manufacturing overhead cost $ 68,600 Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour $ 4.30 The predetermined overhead rate for the Casting Department is closest to: Multiple Choice $2.10 per machine-hour $7.60 per machine-hour $27.71 per machine-hour $9.70 per machine-hour
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