Question

The Maclin Company uses a​ job-costing system at its​ Dover, Delaware, plant. The plant has a machining department and a finishing department. Maclin uses normal costing with two​ direct-cost categories​ (direct materials and direct manufacturing​ labor) and two manufacturing overhead cost pools​ (the machining department with​machine-hours as the allocation base and the finishing department with direct manufacturing labor costs as the allocation​ base). The 2017 budget for the plant is as​follows:

Machining Department

Finishing Department

Manufacturing overhead costs

$9,180,000

$8,181,000

Direct manufacturing labor costs

$920,000

$4,050,000

Direct manufacturing labor-hours

34,000

150,000

Machine-hours

180,000

37,000

1. Identify the components of the overview diagram of Maclin​'s job-costing system.

2. What is the budgeted manufacturing overhead rate in the machining​ department? In the finishing​department?

3. During the month of​ January, the​ job-cost record for Job 431 shows the​ following:

	Machining Department			Finishing Department
Direct materials used		$14,500			$4,500
Direct manufacturing labor costs		$700			$1,400
Direct manufacturing labor-hours		30			70
Machine-hours		130			15

Compute the total manufacturing overhead cost allocated to Job 431.

4. Assuming that Job 431 consisted of 100 units of​ product, what is the cost per​ unit?

5. Amounts at the end of 2017 are as​ follows:

	Machining Department			Finishing Department
Manufacturing overhead incurred		$10,350,000			$8,432,000
Direct manufacturing labor costs		$1,000,000			$4,100,000
Machine-hours		200,000			33,000

Compute the​ under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole.

6. Why might Maclin use two different manufacturing overhead cost pools in its​ job-costing system?

Answer 1