Swango 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 19,000 11,000Direct labor-hours 1,000 8,000Total fixed manufacturing overhead cost$138,700$86,400Variable manufacturing overhead per machine-hour$1.60 Variable manufacturing overhead per direct labor-hour $3.00 The estimated total manufacturing overhead for the Customizing Department is closest to:
A. $110,400
B. $24,000
C. $60,379
D. $86,400
Answer: A
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