Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate 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: Machine-hours Direct labor-hours. Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machining Customizing Machine-hours 30 60 Direct labor-hours The predetermined overhead rate for the Machining Department is closest to: Multiple Choice O $22.93 per machine-hour $6.50 per machine-hour $2.10 per machine-hour 60 10 $8.60 per machine-hour Machining 16,000 2,000 $ 104,000 $ 2.10 Customizing 11,000 6,000 $ 56,400 $3.30

Cornerstones of Cost Management (Cornerstones Series)
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Chapter4: Activity-based Costing
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Problem 3CE: Lansing. Inc., provided the following data for its two producing departments: Machine hours are used...
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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:
Machine-hours
Direct labor-hours
Total fixed manufacturing overhead cost
Job T272:
Machine-hours
Direct labor-hours
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
During the current month the company started and finished Job T272. The following data were recorded for this job:
Customizing
30
60
The predetermined overhead rate for the Machining Department is closest to:
Multiple Choice
Machining
60
10
O
$22.93 per machine-hour
$6.50 per machine-hour
$2.10 per machine-hour
Machining
16,000
2,000
$ 104,000
$ 2.10
$8.60 per machine-hour
Customizing
11,000
6,000
$ 56,400
$3.30
Transcribed Image Text: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: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Job T272: Machine-hours Direct labor-hours Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour During the current month the company started and finished Job T272. The following data were recorded for this job: Customizing 30 60 The predetermined overhead rate for the Machining Department is closest to: Multiple Choice Machining 60 10 O $22.93 per machine-hour $6.50 per machine-hour $2.10 per machine-hour Machining 16,000 2,000 $ 104,000 $ 2.10 $8.60 per machine-hour Customizing 11,000 6,000 $ 56,400 $3.30
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