Destin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and
Question:
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 manufacturing labor costs. Destin provides the following information:
1. Compute the actual and budgeted manufacturing overhead rates for 2007.
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 2007, compute the under- or over allocated manufacturing overhead under normal costing. Why is there no under- or over allocated overhead under actual costing?
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 978-0131495388
12th edition
Authors: Charles T. Horngren, Srikant M. Datar, George Foster