Homework 4 Essay example

Submitted By Liting-Lu
Words: 381
Pages: 2

Liting Lui
Acct 3311
Homework 4

4-17
1. Budgeted manufacturing overhead rate = Budgeted manufacturing overhead cost/ budgeted direct manufacturing labor costs

$2,700,000/ $1,500,000 = 1.80 or 180%

2. Costs of Job 626 under actual and normal costing follow:

Actual Normal Costing Costing
Direct materials $ 40,000 $ 40,000
Direct manufacturing labor costs 30,000 30,000
Manufacturing overhead costs
$30,000 × 1.90; $30,000 × 1.80 57,000 54,000
Total manufacturing costs of Job 626 $127,000 $124,000

3. Total manufacturing overhead allocated under normal costing = Actual manufacturing labor costs × Budgeted overhead rate
= $1,450,000 × 1.80
= $2,610,000

Underallocated manufacturing overhead = Actual manufacturing overhead costs – Manufacturing overhead allocated
= $2,755,000 − $2,610,000 = $145,000

There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by multiplying actual manufacturing labor costs and the actual manufacturing overhead rate. This, of course equals the actual manufacturing overhead costs. All actual overhead costs are allocated to products. Hence, there is no under- or overallocated overhead. 4-20
1. An overview of the product costing system is

Budgeted manufacturing overhead divided by allocation base:
Machining overhead:
50,000
$1,800,000 = $36 per machine-hour
Assembly overhead:
$2,000,000
$3,600,000 = 180% of direct manuf. labor costs
2. Machining department, 2,000 hours × $36 $72,000
Assembly department, 180% × $15,000 27,000
Total manufacturing overhead allocated to Job 494 $99,000

3. Machining Assembly

Actual…