=+5-19 KKK Job costing, accounting for manufacturing overhead, budgeted rates OBJECTIVES 4, 5 Lynn Ltd uses a job-costing system at its Melbourne plant. The plant has a Machining Department and an Assembly Department.

Its job-costing system has two direct cost categories (direct materials and direct manufacturing labour) and two manufacturing overhead cost pools (the Machining Department overhead, allocated to jobs based on actual machine-hours, and the Assembly Department overhead, allocated to jobs based on actual direct manufacturing labour costs). The 2015 budget for the plant is:

Machining Department Assembly Department Manufacturing overhead $1 900 000 $3 000 000 Direct manufacturing labour costs $1 400 000 $2 000 000 Direct manufacturing labour-hours 100 000 200 000 Machine-hours 50 000 200 000 198 Chapter 5: Product and service costing M05_HORN3377_02_LT_C05.indd 198 2/09/13 3:24 PM Required 1 Present an overview diagram of Lynn Ltd’s job-costing system. Calculate the budgeted manufacturing overhead rate for each department.