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 manufacturing 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:
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 manufacturing 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: E: (Click the icon to view the budget data.) Read the requirements. Assembly Department Manuf. Overhead D Cost Allocation Base D E F "} E Machine-Hours Direct Manufacturing Labor Cost F H G G } 1 H Cost Object Product Indirect Costs Direct Costs I- J J } K L - Data table $ $ Manufacturing overhead Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours Machining Department Assembly Department 1,800,000 $ 4,000,000 1,400,000 $ 2,000,000 180,000 250,000 50,000 250,000 Requirements 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: Machining Department Assembly Department Direct materials used $ 45,000 $ 74,000 Direct manufacturing labor costs $ 19,000 $ 20,000 Direct manufacturing labor-hours 1,400 1,800 Machine-hours 2,100 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 over- or underallocated manufacturing overhead for each department. Requirement 1. Identify the components of the overview diagram of Lulu's job-costing system. Compute the budgeted manufacturing overhead rate for each department. (Abbreviations used: Manuf. = manufacturing.) Machining Assembly A } B A Indirect Cost Pool B Machining Department Manuf. Overhead C Assembly Department Manuf. Overhead D Cost Allocation Base D o } E E Machine-Hours F Direct Manufacturing Labor Cost H G G Cost Object Product H Indirect Costs
