Petty Corporation Has Two Production Departments, Milling and Finishing

Multiple Choice

Petty Corporation has two production departments, Milling and Finishing. 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 Finishing 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: The estimated total manufacturing overhead for the Milling Department is closest to:

A) $408,000
B) $38,000
C) $148,000
D) $186,000