Question

The Bennett Company uses a​ job-costing system at its​Dover, Delaware, plant. The plant has a machining department and a finishing department. Bennett 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 finishing department with direct manufacturing labor costs as the allocation​base). The 2017 budget for the plant is as​follows:

Machining Department Finishing Department
Manufacturing overhead costs $ 9,065,000 $ 8,058,000
Direct manufacturing labor costs $ 950,000 $ 3,950,000
Direct manufacturing labor-hours 32,000 145,000
Machine-hours 185,000 35,000
Question:

1. Identify the components of the overview diagram of Bennett​'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 $ 14,500 $ 4,000
Direct manufacturing labor costs $ 800 $ 1,400
Direct manufacturing labor-hours 20 70
Machine-hours 100 15
Compute the total manufacturing overhead cost allocated to Job 431.

4. Assuming that Job 431 consisted of 100 units of​product, what is the cost per​ unit?

5. Amounts at the end of 2017 are as​follows:

Machining Department Finishing Department
Manufacturing overhead incurred $ 12,010,000 $ 9,184,000
Direct manufacturing labor costs $ 980,000 $ 4,600,000
Machine-hours 240,000 33,0000
Compute the​ under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole.

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

Answer 1

Step-by-step explanation:

1) is attached below

2) Budgeted manufacturing overhead rate :

In Machining Department = Manufacturing overhead cost / Machine hrs

= $9065000 /185,000 = $49 per machine hour

In Finishing Department = Manufacturing overhead cost / Direct Manufacturing labor cost

= $8,058000 / $3950,000 = 2.04

3) Machining Department overhead = $20 per machine hr * 100 hrs

= $2000

Finishing Department overhead = $1400 * 204% = $2856

Total manufacturing overhead = $4856

4). Total costs of Job 431:

Direct material - Machining Department = $14500

- Finishing Department = $4000

Direct manufacturing labor - Machining Department = $800

- Finishing Department = $1400

Manufacturing overhead = $4856

Total Cost = $25556

Cost per unit = $25556 / 100 = $255.56

5)

Actual manufacturing overhead machining finishing

Actual manufacturing overhead $12,010,000 $9,184,000

Manufacturing overhead allocated $11,760,000 $9,384,000

($49×240,000) (204%×4600,000)

Under allocated(over allocated) $250,000 $(200,000.00)

For plant as whole:

(12,010,000+$9184,000)-(11760,000+$9384,000)

50000 Under applied.

6) In machining department main focal points is machines , so machine hours is selected for this.In finishing department, labor cost is key area.so it is selected by the company .In both department key area is different so different cost drivers are selected for both departments.