Question
Problem 3 The Simpsons Company uses a normal absorption costing system. The firm has a machining department and an assembly department. Its costing system
Problem 3 The Simpsons Company uses a normal absorption costing system. The firm has a machining department and an assembly department. Its costing system has two direct- cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools: the machining department overhead, allocated to job based on machine-hours, and the assembly department overhead, allocated to jobs based on direct manufacturing labor costs (in dollar amount). The 2019 budgeted (or estimated) information for the plant is as follows: Manufacturing overhead Machining Department $1,800,000 Direct manufacturing labor costs $1,400,000 Direct manufacturing labor-hours 100,000 Machine-hours 50,000 Assembly Department $3,600,000 $2,000,000 200,000 2,000,000 Problem 3 -Part A. Compute the budgeted manufacturing overhead rate for each department. Problem 3 -Part B During February, the production record for Job 787 (our cost object) contained the following: Machining Assembly Department Department Direct materials used $45,000 $70,000 Direct manufacturing labor costs $14,000 $15,000 Direct manufacturing labor- 1,000 1,500 hours 2,000 1,000 Machine-hours Compute the total manufacturing costs allocated to Job 787.
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