4-25 Job costing, accounting for manufacturing overhead, budgeted rates. The Lulu 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 manufactur- ing 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 2020 budget for the plant is as follows: Assembly Department Machining Department Manufacturing overhead Direct manufacturing labor costs $1,800,000 $1,400,000 Direct manufacturing labor-hours 180,000 Machine-hours 50,000 $4,000,000 $2,000,000 250,000 250,000 1. Identify the components of the overview diagram of Lulu'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 $45,000 $19,000 1,400 2,100 Assembly Department $74,000 $20,000 1,800 1,100 Compute the total manufacturing overhead costs allocated to Job 494. 3. At the end of 2020, the actual manufacturing overhead costs were $2,000,000 in machining and $4,100,000 in assembly. Assume that 54,000 actual machine-hours were used in machining and that actual direct manufacturing labor costs in assembly were $2,300,000. Compute the under- or overal- located manufacturing overhead for each department. 4-34 Job costing; variation on actual, normal, and variation of normal costing. Clayton Solutions de- signs Web pages for clients in the education sector. The company's job-costing system has a single direct cost category (Web-designing labor) and a single indirect cost pool composed of all overhead costs. Overhead costs are allocated to individual jobs based on direct labor-hours. The company employs six Web designers. Budgeted and actual information regarding Clayton Solutions follows: Budget for 2020: Direct labor costs $280,000 Direct labor-hours 10,000 Overhead costs $180,000 Actual results for 2020: Direct labor costs $260,000 Direct labor-hours Overhead costs 10,000 $200,000 1. Compute the direct-cost rate and the indirect-cost rate per Web-designing labor-hour for 2020 under (a) actual costing, (b) normal costing, and (c) the variation of normal costing that uses budgeted rates for direct costs. 2. Which method would you suggest Clayton Solutions use? Explain. 3. Clayton Solutions' Web design for Greenville Day School was budgeted to take 95 direct labor-hours. The actual time spent on the project was 80 hours. Compute the cost of the Greenville Day School job using (a) actual costing, (b) normal costing, and (c) the variation of normal costing that uses budgeted rates for direct costs.