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Overview diagram of the job costing system

16/10/2021 Client: muhammad11 Deadline: 2 Day

The Pisano Company_Job Costing, Accounting For Manufacturing Overhead, Budgeted Rates.

Job costing, accounting for manufacturing overhead, budgeted rates.

The Pisano Company uses a job-costing system at its Dover, Delaware, plant. Pisano uses normal costing with two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department with machine-hours as the allocation base and the finished department with direct manufacturing labor costs as the allocation base). The 2014 budget for the plant is as follows:

Machining Department

Finishing Department

Manufacturing overhead costs

$9,065,000

$8,181,000

Direct Manufacturing labor costs

$970,000

$4,050,000

Direct manufacturing labor hours

36,000

155,000

Machine hours

185,000

37,000

1. Prepare an overview diagram of Pisano’s job-costing system.

2. What is the budgeted manufacturing overhead rate in the machining department? In the finishing department?

3. During the month of January, the job-cost record for job 431 shows the following:

Machining Department

Finishing Department

Direct materials used

$13,000

$5,000

Direct manufacturing labor costs

$900

$1,250

Direct manufacturing labor hours

20

70

Machine hours

140

20

Compute the total manufacturing overhead cost allocated to job 431.

4. Assuming that job 431 consisted of 300 units of product, what is the cost per unit?

5. Amounts at the end of 2014 are as follows:

Machining Department

Finishing Department

Manufacturing overhead incurred

$10,000,000

$7,982,000

Direct manufacturing labor costs

$1,030,000

$4,100,000

Machine hours

200,000

34,000

Compute the under or overallocated manufacturing overhead for each department and for the Dover plant as a whole.

6. Why might Pisano use two different manufacturing overhead cost pools in its job-costing system?

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