Question
NylleLtdusesajob-costingsystematitsMelbournefurnitureplant.TheplanthasaMachiningDepartmentandanAssemblyDepartment.Itsjob-costingsystemhastwodirectcostcategories(directmaterialsanddirectmanufacturinglabour)andtwomanufacturingoverheadcostpools(theMachiningDepartmentoverhead,allocatedtojobsbasedonactualmachine-hours,andtheAssemblyDepartmentoverhead,allocatedtojobsbasedonactualdirectmanufacturinglabourcosts).The2023budgetfortheplantis: BUDGET Machining Department Assembly Department AnnualManufacturingoverhead $2,000,000.00$3,200,000.00Directmanufacturinglabourcosts $1,500,000.00 $2,100,000.00Directmanufacturinglabour-hours 120,000.00 220,000.00 Machine-hours 55,000.00 220,000.00 Required: Calculatethebudgetedmanufacturingoverheadrateforeachdepartment.[2marks] DuringFebruary,thejob-costrecordforJob549containedthefollowing: ACTUAL COSTS Job 549 MachiningDepartment AssemblyDepartment Directmaterialsused
NylleLtdusesajob-costingsystematitsMelbournefurnitureplant.TheplanthasaMachiningDepartmentandanAssemblyDepartment.Itsjob-costingsystemhastwodirectcostcategories(directmaterialsanddirectmanufacturinglabour)andtwomanufacturingoverheadcostpools(theMachiningDepartmentoverhead,allocatedtojobsbasedonactualmachine-hours,andtheAssemblyDepartmentoverhead,allocatedtojobsbasedonactualdirectmanufacturinglabourcosts).The2023budgetfortheplantis:
BUDGET
MachiningDepartment
AssemblyDepartment
AnnualManufacturingoverhead $2,000,000.00$3,200,000.00Directmanufacturinglabourcosts $1,500,000.00 $2,100,000.00Directmanufacturinglabour-hours 120,000.00 220,000.00
Machine-hours 55,000.00 220,000.00
Required:
- Calculatethebudgetedmanufacturingoverheadrateforeachdepartment.[2marks]
- DuringFebruary,thejob-costrecordforJob549containedthefollowing:
ACTUALCOSTSJob549 | MachiningDepartment | AssemblyDepartment |
Directmaterialsused | $45000 | $70000 |
Directmanufacturinglabourcosts | $14000 | $15000 |
Directmanufacturinglabour-hours | 1000 | 1500 |
Machine-hours | 2000 | 1000 |
Calculate- |
- thetotalmanufacturingoverheadcostsallocatedtoJob549[2marks]
- thetotalofallcostsfromeachdepartmentrelatingtoJob549[2marks]
- thetotalcostsforjob549.[2marks]
- Attheendof2023,calculatetheover-orunder-allocatedmanufacturingoverheadforeachdepartmentandexplainpossiblecausesfortheover-orunderallocations.[2+5marks]
- Iftheactualcostsfor2023wereaslistedbelow,
- calculatetheActualManufacturingOverheadrateforeachdepartment.[2marks]
- usetheactualratestore-allocateforallcostsrelatedtoJob549.[3marks]
Machining | Assembly | |
ACTUAL2023COSTS | Department | Department |
AnnualManufacturingoverhead | $2100000 | $3700000 |
Directmanufacturinglabourcosts | $1500000 | $2200000 |
Directmanufacturinglabour-hours | 110000 | 208000 |
Machine-hours | 55000 | 205000 |
- WithreferencetoQ4.,explainwhyanormalcostingsystemmightbeusedforthiscompanyratherthananactualcostingsystem.[5marks]
####Formatofcalculations
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