Reference no: EM132973638

Ahlheim Corporation has two production departments, Forming and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Assembly 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:

                                                           Forming                    Assembly

Machine-hours                                          16,000                 15,000

Direct labor-hours                                        2,000                  6,000

Total fixed manufacturing overhead cost         $102,400                  $55,200

Variable manufacturing overhead per machine-hour      $ 2.30

Variable manufacturing overhead per direct labor-hour     $ 4.50

During the current month the company started and finished Job T924. The following data were recorded for this job:

Job T924:

                                          Forming              Assembly

Machine-hours                            70                     20

Direct labor-hours                          30                   40

Direct materials                           $870                $385

Direct labor cost                            $630               $840

Problem 1: The estimated total manufacturing overhead for the Assembly Department is closest to:

Option 1: $27,000

Option 2: $82,200

Option 3: $55,200

Option 4: $47,700