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 15,600 13,600
Direct labor-hours 5,600 6,800
Total fixed manufacturing overhead cost $95,160 $58,480
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 T138. The following data were recorded for this job:
Job T138: Casting Customizing
Machine-hours 100 30
Direct labor-hours 12 80
The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.)
a) $264.00
b) $1,048.00
c) $528.00
d) $89,080.00