For the fiscal year 2003, Custom Metal Works estimated it would incur total overhead costs of $1,200,000 and work 40,000 machine hours. In January 2003, the company worked exclusively on one job—Job #1211. It incurred January costs as follows:

Direct material usage		$120,000
Direct labor (1,400 hours)		30,800
Manufacturing overhead:
Rent	$11,200
Utilities	15,200
Insurance	32,100
Labor	15,500
Depreciation	23,700
Maintenance	10,800
Total OH		108,500
Machine hours worked in January: 3,400

A) Assuming the company uses an actual cost system, compute the January costs assigned to Job #1211.

B) Assuming the company uses a normal cost system, compute the January costs assigned to Job #1211.

C) What is the major factor driving the difference between your answers in parts (a) and (b)?

Answer rating: 100% (QA)

Estimated Budgets Overheads costs Budgeted Machine Hours Rate per Machine hour Machine hours worked ... View the full answer