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ACCT20076, Term3, 2015Assignment2
Manufacturing overhead, Job costing and budgeted
rates – 40 Marks (Themarkswillbeweighteddownto 20marks)
The Holden
Company uses a job-costing system at its Sydney, Ashfield plant. The plant has
a machining department and a finishing department. Holden 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 2013 budget for the
plant is as follows:
Machining Department
Finishing Department
Manufacturing
overhead costs
$9,750,000
$6,296,000
Direct
manufacturing labor costs
$920,000
$3,330,000
Direct
manufacturing labor-hours
42000
145000
Machine-hours
215000
53000
Required:
1.
Prepare
an overview diagram of Holden’s job-costing system.(8 Marks)Required
2.
What
is the budgeted manufacturing overhead rate in the machining department? In the
finishing department?(4 Marks)
3.
During
the month of January, the job-cost record for Job 369 shows the following:
Machining Department
Finishing Department
Manufacturing
overhead costs
17,300
5,200
Direct
manufacturing labor costs
380
1,600
Direct
manufacturing labor-hours
60
60
Machine-hours
142
40
Compute
the total manufacturing overhead cost allocated to Job 369.(4 Marks)
4.
Assuming
that Job 369 consisted of 600 units of product, what is the cost per unit?(10 Marks)
5.
Amounts
at the end of 2013 are as follows:
Machining Department
Finishing Department
Manufacturing
overhead costs
13,100,000
9,360,000
Direct
manufacturing labor costs
950,000
6,450,000
Machine-hours
235000
41000
Compute
the under-or over allocated manufacturing overhead for each department and for
the Sydney plant as a whole.(10 Marks)
6.
Why
might Holden use two different manufacturing overhead cost pools in its
job-costing system?(4 Marks)
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