Mansfield, Inc., has two production departments, Assembly and Packaging. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The predetermined overhead rate in the Assembly Department is based on machine hours (MHs) and it is based on direct labor hours (DLHs) in the Packaging Department. At the beginning of the year, the company made the following estimates:
Assembly Packaging
Direct labor†"hours 5,200 62,000
Machine-hours 68,400 11,900
Total fixed manufacturing overhead cost $390,000 $4,19,000
Variable manufacturing overhead per DLH $3.75
Variable manufacturing overhead per MH $3.0
Required:
a. What is the estimated total manufacturing overhead in the Assembly Department?