Job Costing, accounting for manufacturing overhead, budgeted rates The Solomon Company uses a job-costing system at its
Posted: Tue Nov 16, 2021 9:13 am
Job Costing, accounting for manufacturing overhead, budgeted rates
The Solomon Company uses a job-costing system at its Dover, Delaware plant. The plant has a machining department and a finishing department. Solomon uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department, with machine hours as the allocation base, and the finishing department with the direct manufacturing labor costs as the allocation base). The 2021 budget for the plant is as follows:
Machining Department Finishing Department
Manufacturing Overhead $10.660.000 $7.372.000
Direct Manufacturing Labor costs $940.000 $3.800.000
Direct Manufacturing labor hours 36.000 145.000
Machine hours 205.000 32.000
1. Prepare an overview diagram of Solomon´s job-costing system
2. What is the budgeted overhead rate in the Machining Department? In the finishing department?
3. During the month of January, the job-cost record for Job 431 shows the following:
Machining Department Finishing Department
Direct Materials used $15.500 $5.000
Direct Manufacturing Labor costs $400 $1.100
Direct Manufacturing labor hours 50 50
Machine hours 130 20
Compute the total manufacturing overhead allocated to Job 431.
4. Assuming that Job 431 consisted of 400 units of product, what is the cost per unit?
5. Amounts at the end of 2021 are as follows:
Machining Department Finishing Department
Manufacturing Overhead incurred $11.070.000 $8.236.000
Direct Manufacturing Labor costs $1.000.000 $4.400.000
Machine hours 210.000 31.000
Compute the under –or overallocated manufacturing overhead for each department and for the Dover plant as a whole.
6 Why might Salomon use two different manufacturing overhead cost pools in its job-costing system?
The Solomon Company uses a job-costing system at its Dover, Delaware plant. The plant has a machining department and a finishing department. Solomon uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department, with machine hours as the allocation base, and the finishing department with the direct manufacturing labor costs as the allocation base). The 2021 budget for the plant is as follows:
Machining Department Finishing Department
Manufacturing Overhead $10.660.000 $7.372.000
Direct Manufacturing Labor costs $940.000 $3.800.000
Direct Manufacturing labor hours 36.000 145.000
Machine hours 205.000 32.000
1. Prepare an overview diagram of Solomon´s job-costing system
2. What is the budgeted overhead rate in the Machining Department? In the finishing department?
3. During the month of January, the job-cost record for Job 431 shows the following:
Machining Department Finishing Department
Direct Materials used $15.500 $5.000
Direct Manufacturing Labor costs $400 $1.100
Direct Manufacturing labor hours 50 50
Machine hours 130 20
Compute the total manufacturing overhead allocated to Job 431.
4. Assuming that Job 431 consisted of 400 units of product, what is the cost per unit?
5. Amounts at the end of 2021 are as follows:
Machining Department Finishing Department
Manufacturing Overhead incurred $11.070.000 $8.236.000
Direct Manufacturing Labor costs $1.000.000 $4.400.000
Machine hours 210.000 31.000
Compute the under –or overallocated manufacturing overhead for each department and for the Dover plant as a whole.
6 Why might Salomon use two different manufacturing overhead cost pools in its job-costing system?