4-25 Job cesting, accounting for manufacturing overhead, budgeted rates. The Matthew Company uses a normal job-costing system at its Minneapolis plant. The plant has a machining department and an assem- bly department. Its job-costing system has two direct-cost categories (direct materials and direct manufac- turing labor) 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 labor costs). The 2017 budget for the plant is as follows: Manufacturing overhead Direct manufacturing labor costs Direct manufacturing labor-hours Machine hours Machining Department $1,500,000 $1,600,000 120,000 30,000 Assembly Department $5,100,000 $3,000,000 280,000 270,000 Required 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: Direct materials used Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours Machining Department $42,000 $15,000 1.100 Assembly Department $78,000 $19,000 1.300 1,100 2.800 Compute the total manufacturing overhead costs allocated to Job 494 3. At the end of 2017, 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 labor costs in assembly were $3,200,000. Compute the over or underal located manufacturing overhead for each department 4-26 Job costing, consulting firm. Frontier Partners, a management consulting firm has the following 4-28 Accounting for manufacturing overhead. Creative Woodworking uses normal costing and allocatesman- ufacturing overhead to jobs based on a budgeted labor-hour rate and actual direct labor-hours. Under- or overal located overhead, if immaterial, is written off to Cost of Goods Sold. During 2017, Creative recorded the following Budgeted manufacturing overhead costs Budgeted direct labor-hours Actual manufacturing overhead costs Actual direct labor-hours $4,140,000 180,000 $4,337,000 189.000 Required 1. Compute the budgeted manufacturing overhead rate. 2. Prepare the summary journal entry to record the allocation of manufacturing overhead 3. Compute the amount of under or overallocated manufacturing overhead. Is the amount significant enough to warrant proration of overhead costs, or should Creative Woodworking write it off to cost of goods sold? Prepare the journal entry to dispose of the under-or overallocated overhead. 4-29 Job costing. journal entries. The University of Chicago Press is wholly owned by the university It performs the bulk of its work for other university departments, which pay as though the press were an outside business enterprise. The press also publishes and maintains a stock of books for general sale. The press uses normal costing to cost each job. Its job-costing system has two direct-cost categories direct materials and direct manufacturing labor) and one indirect-cost pool manufacturing overhead, allocated on the basis of direct manufacturing labor costs). ASSIGNVENT MATERIAL The following data (in thousands) pertain to 2017: Direct materials and supplies purchased on credit Direct materials used Indirect materials issued to various production departments Direct manufacturing labor Indirect manufacturing labor incurred by various production departments Depreciation on building and manufacturing equipment Miscellaneous manufacturing overhead incurred by various production departments Iordinarily would be detailed as repairs, photocopying, utilities, etc.) Manufacturing overhead allocated at 160% of direct manufacturing labor costs Cost of goods manufactured Revenues Cost of goods sold (before adjustment for under-or overallocated manufacturing overhead) Inventories, December 31, 2016 Inot 2017): Materials Control Work-in-Process Control Finished Goods Control Required 1. Prepare an overview diagram of the job-costing system at the University of Chicago Press 2 Prepare journal entries to summarize the 2017 transactions. As your final entry, dispose of the year-end under- or overallocated manufacturing overhead as a write-off to Cost of Goods Sold Number your entries. Explanations for each entry may be omitted. 3. Show posted T-accounts for all inventories, Cost of Goods Sold, Manufacturing Overhead Control and Manufacturing Overhead Allocated 4. How did the University of Chicago Press perform in 2017? 4-30 Journal entries. T-accounts, and source documents, Visual Company produces gadgets for the