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 2014. 

2). During March, the job-cost record for Job 626 contained the following information:

Compute the cost of Job 626 using (a) actual costing and (b) normal costing.

3). At the end of 2014, compute the under- or overall located manufacturing overhead under normal costing. Why is there no under- or overall located overhead under actual costing? 

4). Why might managers at Destin Products prefer to use normal costing?

Transcribed Image Text:

Budget for 2014 $2,000,000 Actual Results for 2014 Direct material costs $1,900,000 Direct manufacturing labor costs Manufacturing overhead costs 1,450,000 2,755,000 1,500,000 2,700,000 Budget for 2014 $2,000,000 Actual Results for 2014 Direct material costs $1,900,000 Direct manufacturing labor costs Manufacturing overhead costs 1,450,000 2,755,000 1,500,000 2,700,000

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