Dustin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Dustin allocates manufacturing overhead costs using direct manufacturing labor costs. Dustin provides the following information:

Budget for 2017

Actual Results for 2017

Direct material costs

$2,000,000

$1,950,000

Direct manufacturing labor costs

1,500,000

1,420,000

Manufacturing overhead costs

2,775,000

2,840,000

1.

Compute the actual and budgeted manufacturing overhead rates for 2017.

2.

During March, the job-cost record for Job 626 contained the following information:

Direct materials used

$ 40 comma 000

Direct manufacturing labor costs

$ 30 comma 000

Compute the cost of Job 626 using (a) actual costing and (b) normal costing.

3.

At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing?

4.

Why might managers at Dustin Products prefer to use normal costing?

Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017. (Enter your answer as a number [not as a percentage] rounded to two decimal places, X.XX.)

actual manufacturing overhead rate =

budgeted manufacturing overhead rate +