The Lori 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 manufactunng 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 2014 budget for the plant is as follows.
Requirements:
1. Identify the components of the overview diagram of Lori’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 2014, the actual manufacturing overhead costs were $2,200,000 in machining and $5,600,000 in assembly. Assume that 54,000 actual machine-hours were used in machining and that actual direct manufacturing labor costs in assembly were 53.200,000. Compute the over- or underallocated manufacturing overhead for each department.
Budget data:
Requirment 1 Diagram
