Mahon Corporation has two production departments, Casting and Customization. The company uses a work order costing system and calculates a predetermined overhead rate for each production department. The Foundry Department's predetermined overhead rate is based on machine hours, and the Customization Department's predetermined overhead rate is directly based on labor hours. At the beginning of the current year, the company made the following forecasts:

	Casting		customize
machine-clock		14,000		12,000
Direct working hours		5,000		6,000
Total fixed overhead cost of production	$	112,000	$	48,000
Variable production load per machine-hour	$	2.80
Variable production load per direct labor-hour			$	5.60

During the current month, the company launched and finished Job T138. The following data has been saved for this job:

Case T138:	Casting		customize
machine-clock	70		50
Direct working hours	10		100

The amount of overhead applied to Job T138 in the Customization Department is closest to (Round your intermediate calculations to 2 decimal places.)

Answer rating: 100% (QA)

Calculation of the predetermined overhead rate for each department For the Casting Department based ... View the full answer