4-19 ABC Company uses job-order costing and has assembled ...

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4-19 ABC Company uses job-order costing and has assembled the following cost data for the production and assembly of item X: Direct manufacturing labor wages $35,000 Direct material used 70,000 Indirect manufacturing labor 4,000 Utilities 400 Fire insurance 500 Manufacturing overhead applied 11,000 Indirect materials 6,000 Depreciation on equipment 600 Based on the above cost data, the manufacturing overhead for item X is: a. $500 overallocated. b. $600 underallocated. c. $500 underallocated d. $600 overallocated. 4-20 Under Stanford Corporation's job costing system, manufacturing overhead is applied to work in process using a predetermined annual overhead rate. During November, Year 1, Stanford's transactions included the following: Direct materials issued to production $180,000 Indirect materials issued to production 16,000 Manufacturing overhead incurred 250,000 Manufacturing overhead applied 226,000 Direct manufacturing labor costs 214,000 Stanford had neither beginning nor ending work-in-process inventory. What was the cost of jobs completed and transferred to finished goods in November 20X1? 1. $604,000 2. $644,000 3. $620,000 4. $660,000 4-22 Actual costing, normal costing, accounting for manufacturing overhead. Dakota Products labor) uses and a job-costing one manufacturing overhead cost pool. Dakota allocates manufacturing overhead costs using manu- system with two direct-cost categories (direct materials and direct manufacturing direct facturing labor costs. Dakota provides the following information: Budget for 2017 Actual Results for 2017 Direct material costs $2,250,000 $2,150,000 1,700,000 1,650,000 Direct manufacturing labor costs 3,060,000 3,217,500 Manufacturing overhead costs 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2. During March, the job-cost record for Job 626 contained the following information: Direct materials used $55,000 Direct manufacturing labor costs $45,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated manufacturing overhead under actual costing? 4. Why might managers at Dakota Products prefer to use normal costing? 4-24 Budgeted manufacturing overhead rate, allocated manufacturing overhead. Taylor Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2017: Budgeted manufacturing overhead costs $3,800,000 Budgeted machine-hours 200,000 Actual manufacturing overhead costs $3,660,000 Actual machine-hours 196,000 1. Calculate the budgeted manufacturing overhead rate. 2. Calculate the manufacturing overhead allocated during 2017. 3. Calculate the amount of under- or overallocated manufacturing overhead. Why do Taylor's managers need to calculate this amount?

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