Eisentrout Corporation Has Two Production Departments, Machining and Customizing

question 72

Multiple Choice

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: During the current month the company started and finished Job T272. The following data were recorded for this job:
The estimated total manufacturing overhead for the Machining Department is closest to:

• A) $137,600
• B) $104,000
• C) $33,600
• D) $310,933

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Definitions:

First-In

Often used in the context of inventory management, "First-In" refers to goods that were acquired or produced first being sold, used, or disposed of first.

Average Cost

A method of inventory valuation that determines the cost of goods sold and ending inventory based on the average cost of all similar items in inventory.

Ending Inventory

The price of stock available for transaction at the termination of an accounting interval.

FOB Destination

A shipping term indicating that the seller bears the shipping costs and remains responsible for the goods until they are received and signed for by the purchaser.