The Matthew Company uses a normal job-costing system at its Minneapolis plant. The plant has a machining department and an assembly department. Its job-costing system has two direct-cost categories (direct materials and direct manufacturing labor) and two manufacturing overhead cost pools (the machining department overhead, allocated to jobs based on actual machine-hours, and the assembly department overhead, allocated to jobs based on actual direct manufacturing labor costs). The 2017 budget for the plant is as follows:
Manufacturing overheaDirect manufacturing labor costsDirect manufacturing labor-hoursMachine-hoursMachining Department$ 1.500.000$ 1.600.000120.00030.000Assembly Department$ 5.100.000$ 3.000.000280.000270.000
. 1. Present an overview diagram of Matthew's job-costing system. Compute the budgeted manufacturing overhead rate for each department. 2. During February, the job-cost record for Job 494 contained the following:
Direct materials usedDirect manufacturing labor costsDirect manufacturing labor-hoursMachine-hoursMachining Department$ 42.00$ 15.00011002800Assembly Department$ 78.000$ 19.00013001100
. Compute the total manufacturing overhead costs allocated to Job 494. 3. At the end of 2017, the actual manufacturing overhea costs were $1.800.000 in machining and$5.300.000 in assembly. Assume that 33.000 actual machine-hours were used in machining and that actual direct manufacturing labor costs in assembly were $3.200.000. Compute the over- or underallocated manufacturing overhead for each department.