Comans Corporation Has Two Production Departments, Milling and Customizing

question 156

Multiple Choice

Comans Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling 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 A319. The following data were recorded for this job:

-The amount of overhead applied in the Customizing Department to Job A319 is closest to:

• A) $234.00
• B) $786.00
• C) $552.00
• D) $91,700.00

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Definitions:

Joint Costs

The costs that are incurred from producing two or more products in the same process.

Split-Off

A point in the manufacturing process where joint products are separated and continue through the production process as distinct items.

Sales Margin

The difference between the selling price of a product and its cost of sales, usually represented as a percentage of sales.

Changing Technology

The rapid evolution and adoption of new techniques, tools, and software which can disrupt industries and alter business operations.