The Maclin Company uses a job-costing system at its Dover, Delaware, plant. The plant has a machining department and a finishing department. Maclin uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department withmachine-hours as the allocation base and the finishing department with direct manufacturing labor costs as the allocation base). The 2017 budget for the plant is asfollows: Machining Department Finishing Department Manufacturing overhead costs $9,180,000 $8,181,000 Direct manufacturing labor costs $920,000 $4,050,000 Direct manufacturing labor-hours 34,000 150,000 Machine-hours 180,000 37,000 Question: 5. Amounts at the end of 2017 are as follows: Machining Finishing Department Department Manufacturing overhead $10,350,000 $8,432,000 incurred Direct manufacturing labor $1,000,000 $4,100,000 costs Machine-hours 200,000 33,000 Compute the under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole. 6. Why might Maclin use two different manufacturing overhead cost pools in its job-costing system?
The Maclin Company uses a job-costing system at its Dover, Delaware, plant. The plant has a machining department and a finishing department. Maclin uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department withmachine-hours as the allocation base and the finishing department with direct manufacturing labor costs as the allocation base). The 2017 budget for the plant is asfollows: Machining Department Finishing Department Manufacturing overhead costs $9,180,000 $8,181,000 Direct manufacturing labor costs $920,000 $4,050,000 Direct manufacturing labor-hours 34,000 150,000 Machine-hours 180,000 37,000 Question: 5. Amounts at the end of 2017 are as follows: Machining Finishing Department Department Manufacturing overhead $10,350,000 $8,432,000 incurred Direct manufacturing labor $1,000,000 $4,100,000 costs Machine-hours 200,000 33,000 Compute the under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole. 6. Why might Maclin use two different manufacturing overhead cost pools in its job-costing system?
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Transcribed Image Text:The Maclin Company uses a job-costing system at its Dover, Delaware, plant. The plant has a machining
department and a finishing department. Maclin uses normal costing with two direct-cost categories (direct
materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining
department withmachine-hours as the allocation base and the finishing department with direct
manufacturing labor costs as the allocation base). The 2017 budget for the plant is asfollows:
Machining Department
Finishing Department
Manufacturing overhead costs
$9,180,000
$8,181,000
Direct manufacturing labor costs
$920,000
$4,050,000
Direct manufacturing labor-hours
34,000
150,000
Machine-hours
180,000
37,000
Question:
5. Amounts at the end of 2017 are as follows:
Machining
Finishing
Department
Department
Manufacturing overhead
$10,350,000
$8,432,000
incurred
Direct manufacturing labor
$1,000,000
$4,100,000
costs
Machine-hours
200,000
33,000
Compute the under- or overallocated manufacturing overhead for each department and for the Dover
plant as a whole.
6. Why might Maclin use two different manufacturing overhead cost pools in its job-costing system?
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