Eisentrout Corporation Has Two Production Departments, Machining and Customizing

Multiple Choice

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: During the current month the company started and finished Job T272. The following data were recorded for this job:
The predetermined overhead rate for the Machining Department is closest to:

A) $22.93 per machine-hour
B) $6.50 per machine-hour
C) $2.10 per machine-hour
D) $8.60 per machine-hour