(Normal versus actual costing) For fiscal year 1998, Synthetic Solutions estimated it would incur total overhead costs of $1,200,000 and work 40,000 machine hours. During January 1998, the company worked exclusively on one job, Job #1211. It incurred January costs as follows:

a. Assuming the company uses an actual cost system, compute the January costs assigned to Job #1211.

b. Assuming the company uses a normal cost system, compute the January costs assigned to Job #1211.

c. What is the major factor driving the difference between your answers in parts a and b?LO1

Transcribed Image Text:

Direct material usage Direct labor (1,400 hours) Manufacturing overhead: Rent Utilities Insurance Labor Depreciation Maintenance Total OH $121,000 30,800 $11,200 15,200 32,100 15,500 23,700 10,800 108,500 Machine hours worked in January: 3,400