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Eisentrout corporation has two production departments, machining and customizing. the company uses a job-order costing system and computes a predetermined overhead rate in each production department. the machining 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:
machining customizing
machine-hours 13,000 29,000
direct labor-hours 19,000 5,000
total fixed manufacturing overhead cost $ 68,900 $ 20,500
variable manufacturing overhead per machine-hour $ 1.00
variable manufacturing overhead per direct labor-hour $ 4.20
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