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 Q. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated manufacturing overhead under actual costing?
Actual costing, normal costing, accounting for manufacturing
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
Q. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated manufacturing overhead under actual costing?
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