Prayer Corporation Has Two Production Departments, Machining and Customizing

Multiple Choice

Prayer 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: The estimated total manufacturing overhead for the Machining Department is closest to:

A) $148,200
B) $110,200
C) $38,000
D) $299,725