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Tracy Manufacturing is a small manufacturer that uses labour-hours as the base for assigning overhead costs to jobs. The company estimated the following amounts the
Tracy Manufacturing is a small manufacturer that uses labour-hours as the base for assigning overhead costs to jobs. The company estimated the following amounts the company and for the following jobs: Company Job A1 Job B1 (Budget) (Actual) (Actual) Direct materials $80,000 $5,000 $7,100 Direct labour $20,000 $2,500 $3,200 Manufacturing overhead costs $66,000 Labour rate (average per hour) $20 $20 $20 Machine hours 9,000 hr 500 hr 800 hr During the year, the actual labour-hours totalled 9,800, and actual overhead costs were $71,000 for the company as a whole. Required: (Round to the nearest cents) a. Calculate the predetermined and actual manufacturing overhead rates for Jobs A1 and B1. (10) b. How much are total manufacturing costs of Jobs A1 and B1 under the normal costing system? (10) c. How much are total manufacturing costs of jobs A1 and B1 under the actual costing system? (10) d. How much overhead is over or under-applied for the year for the whole company? (10) (State amount and whether it's over or under.)
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