**Actual Costing, Normal Costing, Accounting for Manufacturing Overhead**Dakota Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manufacturing labor costs. Dakota provides the following information:| | Budget for 2017 | Actual Results for 2017 ||---------------------|-----------------|-------------------------|| Direct material costs | $2,250,000 | $2,150,000 || Direct manufacturing labor costs | $1,700,000 | $1,650,000 || Manufacturing overhead costs | $3,060,000 | $3,217,500 |1. **Compute the actual and budgeted manufacturing overhead rates for 2017.**2. **During March, the job-cost record for Job 626 contained the following information:** - Direct materials used: $55,000 - Direct manufacturing labor costs: $45,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing.3. **At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing.**4. **Why is there no under- or overallocated manufacturing overhead under actual costing?**5. **Why might managers at Dakota Products prefer to use normal costing?**

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4-22 Actual costing, normal costing, accounting for manufacturing overhead. Dakota job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manu- facturing labor costs. Dakota provides the following information: uses a Budget for 2017 $2,250,000 Actual Results for 2017 $2,150,000 Direct material costs 1,650,000 Direct manufacturing labor costs Manufacturing overhead costs 1,700,000 3,060,000 3,217,500 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2 During March, the job-cost record for Job 626 contained the following information: Direct materials used Direct manufacturing labor costs $55,000 $45,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costin Why is there no under- or overallocated manufacturing overhead under actual costing?

4-22 Actual costing, normal costing, accounting for manufacturing overhead. Dakota job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using direct manu- facturing labor costs. Dakota provides the following information: uses a Budget for 2017 $2,250,000 Actual Results for 2017 $2,150,000 Direct material costs 1,650,000 Direct manufacturing labor costs Manufacturing overhead costs 1,700,000 3,060,000 3,217,500 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2 During March, the job-cost record for Job 626 contained the following information: Direct materials used Direct manufacturing labor costs $55,000 $45,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costin Why is there no under- or overallocated manufacturing overhead under actual costing?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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