Garza 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 20,000 13,000Direct labor-hours 1,000 7,000Total fixed manufacturing overhead cost$152,000$68,600Variable manufacturing overhead per machine-hour$2.10 Variable manufacturing overhead per direct labor-hour $4.30The estimated total manufacturing overhead for the Customizing Department is closest to:
A. $30,100
B. $68,600
C. $98,700
D. $54,110
Answer: C
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