Reference no: EM132579492

Mahon 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                                                          16,400                          13,400

Direct labor-hours                                                   5,600                                6,700

Total fixed manufacturing overhead cost                       $106,600                         $58,290

Variable manufacturing overhead per machine-hour     $3.00

Variable manufacturing overhead per direct labor-hour   $5.90

During the current month the company started and finished Job T138. The following data were recorded for this job:

Job T138:

Casting Customizing

Machine-hours60 30

Direct labor-hours13 80

Question 1: The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

Option 1: $615.00

Option 2: $97,820.00

Option 3: $1,168.00

Option 4: $307.50