Eisentrout Corporation Has Two Production Departments, Machining and Customizing

question 260

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 predetermined overhead rate for the Customizing Department is closest to:

• A) $3.30 per direct labor-hour
• B) $12.70 per direct labor-hour
• C) $9.40 per direct labor-hour
• D) $4.76 per direct labor-hour

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