4-22Job costing, accounting for manufacturing overhead, budgeted rates. (LO 3, 4, 5)The Matthew Company uses a normal job-costing system at its Minneapolis 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 yearly budget for the plant is as follows:

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The table is as follows.

Parameter	Machining Department	Assembly Department
Manufacturing overhead	$1,500,000	$5,100,000
Direct manufacturing labour costs	$1,600,000	$3,000,000
Direct manufacturing labour hours	120,000	280,000
Machine hours	30,000	270,000

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1. Present an overview diagram of Matthew's job-costing system. Compute the budgeted manufacturing overhead rate for each department.
2. During February, the job-cost record for Job 494 contained the following:

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The table is as follows.

Parameter	Machining Department	Assembly Department
Direct materials used	$42,000	$78,000
Direct manufacturing labour costs	$15,000	$19,000
Direct manufacturing labour hours	1,100	1,300
Machine hours	2,800	1,100

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1. Compute the total manufacturing overhead costs allocated to Job 494.
2. At the end of year, the actual manufacturing overhead costs were $1,800,000 in machining and $5,300,000 in assembly. Assume that 33,000 actual machine-hours were used in machining and that actual direct manufacturing labour costs in assembly were $3,200,000. Compute the over- or underallocated manufacturing overhead for each department.

Check Figure: Machining department overhead is $50/hr