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The Xio Company uses a job-costing system at its plant. The plant has a forming department and a boxing department. Xio uses normal costing with
The Xio Company uses a job-costing system at its plant. The plant has a forming department and a boxing department. Xio uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the Forming department with machine-hours as the allocation base and the Boxing department with direct manufacturing labor costs as the allocation base). The 2017 budget for the plant is as follows: Forming Department Boxing Department Manufacturing overhead costs $21,662,500 $20,452,500 Direct manufacturing labor costs $ 2,425,000 $7,181,000 Direct manufacturing labor-hours 45,000 193,750 Machine-hours 231,250 46,250 1. What is the budgeted manufacturing overhead rate in the Forming department? 2. What is the budgeted manufacturing overhead rate in the Boxing department? 3. During the month of March, the job-cost record for Job 232 shows the following: Forming Department Boxing Department Direct materials used $32,500 $12,500 Direct manufacturing labor costs $ 2,250 $3,125 Direct manufacturing labor-hours 25 90 Machine-hours 175 25 Compute the total manufacturing overhead cost allocated to Job 232. 4. Assuming that Job 232 consisted of 400 units of product, what is the total cost per unit? 5. Amounts at the end of 2017 are as follows: Forming Department Boxing Department Manufacturing overhead incurred $25,000,000 $19,950,000 Direct manufacturing labor costs $ 2,575,000 $8,250,000 Machine-hours 250,000 42,500 Compute the under- or overallocated manufacturing overhead for each department and for the plant as a whole. 6. Mention 2 advantages of having two different manufacturing overhead cost pools in its job-costing system and on what basis these pools are created?
The Xio Company uses a job-costing system at its plant. The plant has a forming department and a boxing department. Xio uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the Forming department with machine-hours as the allocation base and the Boxing department with direct manufacturing labor costs as the allocation base). The 2017 budget for the plant is as follows:
Forming
Department
Boxing Department
Manufacturing overhead costs
$21,662,500
$20,452,500
Direct manufacturing labor costs
$ 2,425,000
$7,181,000
Direct manufacturing labor-hours
45,000
193,750
Machine-hours
231,250
46,250
1. What is the budgeted manufacturing overhead rate in the Forming department?
2. What is the budgeted manufacturing overhead rate in the Boxing department?
3. During the month of March, the job-cost record for Job 232 shows the following:
Forming
Department
Boxing
Department
Direct materials used
$32,500
$12,500
Direct manufacturing labor costs
$ 2,250
$3,125
Direct manufacturing labor-hours
25
90
Machine-hours
175
25
Compute the total manufacturing overhead cost allocated to Job 232.
4. Assuming that Job 232 consisted of 400 units of product, what is the total cost per unit?
5. Amounts at the end of 2017 are as follows:
Forming
Department
Boxing Department
Manufacturing overhead incurred
$25,000,000
$19,950,000
Direct manufacturing labor costs
$ 2,575,000
$8,250,000
Machine-hours
250,000
42,500
Compute the under- or overallocated manufacturing overhead for each department and for the plant as a whole.
6. Mention 2 advantages of having two different manufacturing overhead cost pools in its job-costing system and on what basis these pools are created?
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