4-17 Actual costing, normal costing, accounting for manufacturing overhead. Destin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Destin allocates manufacturing overhead costs using direct manu- facturing labor costs. Destin provides the following information: Budget for 2011 $2,000,000 Actual Results for 2011 Direct material costs Direct manufacturing labor costs Manufacturing overhead costs $1,900,000 1,450,000 2,755,000 1,500,000 2,700,000 1. Compute the actual and budgeted manufacturing overhead rates for 2011. 2. During March, the job-cost record for Job 626 contained the following information: Direct materials used $40,000 Direct manufacturing labor costs $30,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2011, compute the under- or overallocated manufacturing overhead under normal cost- ing. Why is there no under- or overallocated overhead under actual costing?
4-17 Actual costing, normal costing, accounting for manufacturing overhead. Destin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Destin allocates manufacturing overhead costs using direct manu- facturing labor costs. Destin provides the following information: Budget for 2011 $2,000,000 Actual Results for 2011 Direct material costs Direct manufacturing labor costs Manufacturing overhead costs $1,900,000 1,450,000 2,755,000 1,500,000 2,700,000 1. Compute the actual and budgeted manufacturing overhead rates for 2011. 2. During March, the job-cost record for Job 626 contained the following information: Direct materials used $40,000 Direct manufacturing labor costs $30,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2011, compute the under- or overallocated manufacturing overhead under normal cost- ing. Why is there no under- or overallocated overhead under actual costing?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:4-17 Actual costing, normal costing, accounting for manufacturing overhead. Destin Products uses a
job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and
one manufacturing overhead cost pool. Destin allocates manufacturing overhead costs using direct manu-
facturing labor costs. Destin provides the following information:
Budget for 2011
Actual Results for 2011
Direct material costs
$2,000,000
$1,900,000
1,500,000
Direct manufacturing labor costs
Manufacturing overhead costs
1,450,000
2,700,000
2,755,000
1. Compute the actual and budgeted manufacturing overhead rates for 2011.
2. During March, the job-cost record for Job 626 contained the following information:
Required
Direct materials used
$40,000
$30,000
Direct manufacturing labor costs
Compute the cost of Job 626 using (a) actual costing and (b) normal costing.
3. At the end of 2011, compute the under- or overallocated manufacturing overhead under normal cost-
ing. Why is there no under- or overallocated overhead under actual costing?
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