Question

The Standard Company uses a job-costing system at its plant. The plant has an assembly department and a painting department. Standard uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the assembly department with machine-hours as the allocation base and the painting department with direct manufacturing labor costs as the allocation base). The 2018 budget for the plant is as follows:

	Assembly Department	Painting Department
Manufacturing overhead costs	$22,662,500	$20,452,500
Direct manufacturing labor costs	$ 2,425,000	$8,181,000
Direct manufacturing labor-hours	45,000	193,750
Machine-hours	231,250	46,250

1.      What is the budgeted manufacturing overhead rate in the assembly department? (6 points)

2.      What is the budgeted manufacturing overhead rate in the painting department? (6 points)

3.      During the month of March, the job-cost record for Job 111 shows the following:

	Assembly Department	Painting Department
Direct materials used	$32,500	$12,500
Direct manufacturing labor costs	$ 2,250	$3,125
Direct manufacturing labor-hours	25	90
Machine-hours	175	25

Compute the total manufacturing overhead cost allocated to Job 111. (10 points)

4.      Assuming that Job 111 consisted of 500 units of product, what is the total cost per unit? (12 points)

5.      Amounts at the end of 2018 are as follows:

	Assembly Department	Painting Department
Manufacturing overhead incurred	$25,000,000	$19,950,000
Direct manufacturing labor costs	$ 2,575,000	$8,250,000
Machine-hours	250,000	42,500

Compute the under- or overallocated manufacturing overhead for each department and for the plant as a whole. (10 points)

6.  Why might Standard use two different manufacturing overhead cost pools in its job-costing system? (6 points)

please can you solve this quickly , thank you sir

Answer 1

Answer :

1.Budgeted manufacturing OVer Head in assemble Department =Manufacturing Over heads/Machine Hours

=$22662500/231250

=$98 per machine Hour

budgeted manufacturing overhead rate in the assembly department =$98

2.the budgeted manufacturing overhead rate in the painting department=Manufacturing Over heads/Machine Hours=

=$20452500/$8181000

=$2.50 per direct labor cost

budgeted manufacturing overhead rate in the painting department=$2.50

3.Computation of  the total manufacturing overhead cost allocated to Job 111:

Manufacturing Over Heads Painting Department =3125*$2.5=$7,812.50

Manufacturing Over Heads Assembly Department=175*$98=$17,150

Total Manufacturing Over Heads Cost =$7,812.5+$17,150=$24,962.5

4.The total cost per unit :

Particulars	Assembly Department	Painting Department	Total
Direct materials used	$                        32,500.00	$                     12,500.00	$     45,000.00
Direct manufacturing labor costs	$                          2,250.00	$                       3,125.00	$       5,375.00
Manufacturing Over Heads Painting Department($3125*2.5)	$                                       -	$                       7,812.50	$       7,812.50
Manufacturing Over Heads Assembly Department(175*$98)	$                        17,150.00	$                                    -	$     17,150.00
Total Cost	$                        51,900.00	$                     23,437.50	$     75,337.50
Per Unit Cost (Total Cost/500)		$           150.68

The total cost per unit for Job 111 is $150.68