Kalp Corporation Has Two Production Departments, Machining and Finishing

question 266

Multiple Choice

Kalp Corporation has two production departments, Machining and Finishing. 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 Finishing 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 K928. The following data were recorded for this job:
The estimated total manufacturing overhead for the Machining Department is closest to:

• A) $136,800
• B) $34,200
• C) $171,000
• D) $359,100

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Definitions:

Insourcing

The practice of performing a business function internally rather than outsourcing it to an external provider or company.

Reverse Outsourcing

The practice where jobs or tasks are brought back in-house from an external service provider, often to regain control or reduce costs.

Nearshoring

The practice of transferring a business operation to a nearby country, often to reduce costs and improve collaboration due to geographical proximity.

Onshoring

The process of returning a business's production or services to its home country from overseas to benefit from domestic advantages.