The Matthew Company uses a normal 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 2017 budget for the plant is as follows:

Required

1. Present an overview diagram of Matthew’s job-costing system. Compute the budgeted manufacturing overhead 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 2017, the actual manufacturing overhead costs were $1,800,000 in machining and $5,300,000 in assembly. Assume that 33,000 actual machine-hours were used in machining and that actual direct manufacturing labor costs in assembly were $3,200,000. Compute the over- or under allocated manufacturing overhead for each department.

Transcribed Image Text:

Machining Department Assembly Department Manufacturing overhead Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours $1,500,000 $1,600,000 120,000 30,000 $5,100,000 $3,000,000 280,000 270,000 Direct materials used Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours Machining Department $42,000 $15,000 1,100 2,800 Assembly Departmen $78,000 S19,000 1,300 1,100