Question

2014 Budget

	Machining Department		Finishing Department
Manufacturing overhead costs	$10,000,000			$8,217,000
Direct manufacturing labor costs	$910,000			$4,150,000
Direct manufacturing labor-hours	34,000			175,000
Machine-hours	200,000			33,000

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 $15,000 $5,000 Direct manufacturing labor costs $500 $1,400 Direct manufacturing labor-hours 50 70 Machine-hours 160 15 Compute the total manufacturing overhead cost allocated to Job 431.
4.	Assuming that Job 431 consisted of 300 units of​ product, what is the cost per​ unit?

Answer 1

2). Budgeted manufacturing overhead rate :
In Machining Departement = Manufacturing overhead cost / Machine hrs
= $10,000,000 / 200,000 = $50 per machine hour

In Finishing Department = Manufacturing overhead cost / Direct Manufacturing labor cost
= $8,217,000 / $4,150,000 = 1.98 or 198%

3). Machining Department overhead = $50 per machine hr * 160 hrs = $8000
Finishing Department overhead = $1400 * 198% = $2772
Total manufacturing overhead = $10772

4). Total costs of Job 431:
Direct material - Machining Department = $15000
                      - Finishing Department = $5,000
Direct manufacturing labor - Machining Department = $500
                                      - Finishing Department = $1400
Manufacturing overhead = $10,772
Total Cost = $32,672

Cost per unit = $32,672 / 300 = $108.91