=+5-37 KKK Job costing, accounting for manufacturing overhead, budgeted rates OBJECTIVE 4 Grundy Ltd uses a job-costing system at its Maleny plant. The plant has a Machining Department and a Finishing Department. Grundy Ltd uses normal costing with two direct cost categories (direct materials and direct manufacturing labour) and two indirect cost pools

(the Machining Department, with machine-hours as the allocation base, and the Finishing Department, with direct manufacturing labour costs as the allocation base). The 2014 budget for the plant is as follows:

Machining Department Finishing Department Indirect costs $850 000 $6 500 000 Direct manufacturing labour costs $650 000 $3 500 000 Direct manufacturing labour-hours 30 000 170 000 Machine-hours 190 000 35 000 Required 1 Prepare an overview diagram of Grundy Ltd’s job-costing system.