Job costing, accounting for manufacturing overhead, budgeted rates. The Lynn Company uses a job-costing system at its Minneapolis plant. The plant has a Machining Department and an Assembly Department. Its job-costing system has two direct-cost categories )direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the Machining Department overhead, allocated to jobs based on actual machine-hours, and the Assembly Department overhead, allocated to jobs based on actual direct manufacturing labor costs). The 2009 budget for the plant is:

1. Present an overview diagram of Lynn’s job-costing system. Compute the budgeted manufacturing over head rate for each department.

2. During February, the job-cost record for Job 494 contained the following:

Compute the total manufacturing overhead costs allocated to Job 494.

3. At the end of 2009, the actual manufacturing overhead costs were $2,100,000 in Machining and $3,700,000 in Assembly. Assume that 55,000 actual machine-hours were used in Machining and that actual direct manufacturing labor costs in Assembly were $2,200,000. Compute the over- or under allocated manufacturing overhead for each department.

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Machining Department Assembly Department Manufacturing overhead Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours $3,600,000 $2,000,000 200,000 200,000 $1,800,000 $1,400,000 100,000 50,000