Kroeker Corporation has two production departments, Milling and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling 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: MillingCustomizingMachine-hours 17,000 12,000Direct labor-hours 1,000 9,000Total fixed manufacturing overhead cost$112,200$81,000Variable manufacturing overhead per machine-hour$1.70 Variable manufacturing overhead per direct labor-hour $4.30 During the current month the company started and finished Job T898. The following data were
recorded for this job: Job T898:MillingCustomizingMachine-hours 80 30Direct labor-hours 20 50The amount of overhead applied in the Customizing Department to Job T898 is closest to:
A. $215.00
B. $119,700.00
C. $665.00
D. $450.00
Answer: C
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