Machining Department Finishing Department Manufacturing overhead costs Direct manufacturing labor costs Direct manufacturing labor-hours $10,660,000 $8,000,000 $ 970,000 S4,000,000 26,000 160,000 Machine-hours 205,000 31,000 Required 1. Prepare an overview diagram of Solomon's job-costing system. 2. What is the budgeted manufacturing 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 $16,150 $3,000 $ 350 $ 1,300 Direct manufacturing labor costs Direct manufacturing labor-hours 30 50 Machine-hours 150 Compute the total manufacturing overhead cost 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 2017 are as follows: Machining Department Finishing Department Manufacturing overhead incurred Direct manufacturing labor costs $13,250,000 $8,400,000 $ 1,000,000 $4,300,000 Machine-hours 250,000 30,000 Compute the under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole. 6. Why might Solomon use two different manufacturing overhead cost pools in its job-costing system? 20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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 nishing 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 nishing department with direct manufacturing labor costs as the allocation base). The 2017 budget for the plant is as follows:

Machining Department
Finishing Department
Manufacturing overhead costs
Direct manufacturing labor costs
Direct manufacturing labor-hours
$10,660,000
$8,000,000
$ 970,000
S4,000,000
26,000
160,000
Machine-hours
205,000
31,000
Required
1. Prepare an overview diagram of Solomon's job-costing system.
2. What is the budgeted manufacturing 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
$16,150
$3,000
$ 350
$ 1,300
Direct manufacturing labor costs
Direct manufacturing labor-hours
30
50
Machine-hours
150
Compute the total manufacturing overhead cost 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 2017 are as follows:
Machining Department
Finishing Department
Manufacturing overhead incurred
Direct manufacturing labor costs
$13,250,000
$8,400,000
$ 1,000,000
$4,300,000
Machine-hours
250,000
30,000
Compute the under- or overallocated manufacturing overhead for each department and for the Dover
plant as a whole.
6. Why might Solomon use two different manufacturing overhead cost pools in its job-costing system?
20

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