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 ratein the Forming department?(4%)

2.What is the budgeted manufacturing overhead rate in the Boxing department?(4%)

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.(6%)

4.Assuming that Job 232 consisted of 400 units of product, what is the total cost per unit?(5%)

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.(8%)

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?(6%)