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: CastingCustomizingMachine-hours 18,000 14,000Direct labor-hours 2,000 7,000Total fixed manufacturing overhead cost$124,200$68,600Variable manufacturing overhead per machine-hour$1.90 Variable manufacturing overhead per direct labor-hour $3.80 During the current month the company started and finished Job T138. The following data were
recorded for this job: Job T138:Casting CustomizingMachine-hours70 30Direct labor-hours10 60 The amount of overhead applied in the Customizing Department to Job T138 is closest to:
A. $95,200.00
B. $816.00
C. $588.00
D. $228.00
Answer: B
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