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    Calculation of manufacturing overhead and job costs

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    4-17 Actual costing, normal costing, accounting for manufacturing overhead. 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:
    Budget for Actual Results
    2007 for 2007
    Direct material costs $1,500,000 $1,450,000
    Direct manufacturing labor costs 1,000,000 980,000
    Manufacturing overhead costs 1,750,000 1,862,000
    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 overallocated manufacturing overhead under normal costing.
    Why is there no under- or overallocated overhead under actual costing?
    ISBN: 0-536-12110-9

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    4-17 Actual costing, normal costing, accounting for manufacturing overhead. 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:
    Budget for Actual Results
    2007 for 2007
    Direct material costs $1,500,000 $1,450,000
    Direct manufacturing labor costs 1,000,000 980,000
    Manufacturing overhead costs 1,750,000 1,862,000
    1. Compute the actual ...

    Solution Summary

    Solution explains how to calculate manufacturing overhead rates and the total job cost under normal costing and actual costing

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