E Test: Exam 2 Question 7 of 26 st X Data table Dustin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing over les the following information: (Click the icon to view the information.) Budget for 2020 Actual Results for 2020 Read the requirements. Direct material costs $ 2, 100,000 $ 1,950,000 Direct manufacturing labor costs 1,650,000 1,600,000 Manufacturing overhead costs 2,805,000 3,040,000 Direct materials Direct manufacturing labor costs Manufacturing overhead costs Print Done Total manufacturing costs of Job 626 Requirement 3. At the end of 2020, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing? Under normal costing, manufacturing overhead is by Why is there no under- or overallocated overhead under actual costing? There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by multiplying manufacturing labor costs and the manufacturing overhead rate. Requirement 4. Why might managers at Dustin Products prefer to use normal costing? (Choose all that apply.) A. Normal costing provides managers with information earlier-while there is still time to take corrective actions, such as improving the company's labor efficiency or reducing the company's overhead costs. B. Manufacturing costs of a job are available much earlier in a normal costing system. Consequently, Dustin's manufacturing and sales managers can evaluate the profitability of different jobs, the efficiency with which the jobs are done, and the pricing of different jobs as soon as they are completed, while the experience is still fresh in everyone's mind. C. Normal costing provides managers with information at the end of a fiscal year when they know actual manufacturing overhead costs. This approach is preferable to managers to improve the company's spending efficiency and increase overall profits. D. Normal costing enables Dustin Products to use the budgeted manufacturing overhead rate determined at the beginning of the year to estimate the cost of a job as soon as the job is completed. Managers want to know job costs for ongoing uses, including pricing jobs, monitoring and managing costs, evaluating the success of the job, learning about what did and did not work, bidding on new jobs, and preparing interim financial statements. E. Normal costing allows managers to allocate overhead costs at the end of the accounting year. This allows Dustin Products to use the normal costs incurred to provide an accurate costing method so that adjustments will not need to be made at the end of the accounting year.E Test: Exam 2 Question 7 of 26 This test: 145 point(s) possible This question: 16 point(s) possible Submit test 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: - X Requirements Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2020. (Enter your answer as a number [not as a percentage] rounded to tv Actual manufacturing overhead rate 1. Compute the actual and budgeted manufacturing overhead rates for 2020. 2. During March, the job-cost record for Job 626 contained the following information: Budgeted manufacturing overhead rate = Direct materials used $50,000 Requirement 2. During March, the job-cost record for Job 626 contained the following information: Direct manufacturing labor costs $40,000 Direct materials used $50,000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. Direct manufacturing labor costs $40,000 3. At the end of 2020, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual Compute the cost of Job 626 using (a) actual costing and (b) normal costing. costing? Actual 4. Why might managers at Dustin Products prefer to use normal costing? Normal Costing Costing Direct materials Direct manufacturing labor costs Print Done Manufacturing overhead costs Total manufacturing costs of Job 626 Requirement 3. At the end of 2020, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing? Under normal costing, manufacturing overhead is by Why is there no under- or overallocated overhead under actual costing? There is no under- or overallocated overhead under actual costing because overhead is allocated under actual costing by multiplying manufacturing labor costs and the manufacturing overhead rate. Requirement 4. Why might managers at Dustin Products prefer to use normal costing? (Choose all that apply.) A Normal ansting provides are with information orliar while thann is still time to takea an crantion actions such as improving the samnami's lahar affinianou or radining the nameands quarhand a