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Desert Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Desert allocates manufacturing overhead costs using direct manufacturing labor costs. Desert provides the following information: (Click the icon to view the information.) Read the requirements Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017. (Enter your answer as a number [not as a percentage] rounded to two decimal places, X.XX.) Actual manufacturing overhead rate - X Budgeted manufacturing overhead rate Data Table Requirements Budget for 2017 Actual Results for 2017 Direct material costs 2,100,000 $ 2,050,000 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2. During March, the job-cost record for Job 626 contained the following information: Direct manufacturing labor costs 1,500,000 1,460,000 Direct materials used Manufacturing overhead costs 2,775,000 2,920,000 $50,000 $30,000 Direct manufacturing labor costs Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing? 4. Why might managers at Desert Products prefer to use normal costing? Print Done

Desert Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Desert allocates manufacturing overhead costs using direct manufacturing labor costs. Desert provides the following information: (Click the icon to view the information.) Read the requirements Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017. (Enter your answer as a number [not as a percentage] rounded to two decimal places, X.XX.) Actual manufacturing overhead rate - X Budgeted manufacturing overhead rate Data Table Requirements Budget for 2017 Actual Results for 2017 Direct material costs 2,100,000 $ 2,050,000 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2. During March, the job-cost record for Job 626 contained the following information: Direct manufacturing labor costs 1,500,000 1,460,000 Direct materials used Manufacturing overhead costs 2,775,000 2,920,000 $50,000 $30,000 Direct manufacturing labor costs Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing? 4. Why might managers at Desert Products prefer to use normal costing? Print Done

Principles of Cost Accounting
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 10E: Compute the total job cost for each of the following scenarios: a. If the direct labor cost method...
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Desert Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Desert allocates manufacturing overhead costs using direct manufacturing labor costs. Desert provides the following information: E (Click the icon to view the information.) Read the requirements ... Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017. (Enter your answer as a number [not as a percentage] rounded to two decimal places, X.XX.) Actual manufacturing overhead rate Budgeted manufacturing overhead rate Data Table Requirements Budget for 2017 Actual Results for 2017 Direct material costs 2,100,000 $ 2.050,000 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2. During March, the job-cost record for Job 626 contained the following information: Direct manufacturing labor costs 1,500,000 1,460,000 Direct materials used $50,000 Manufacturing overhead costs 2,775,000 2.920,000 Direct manufacturing labor costs $30.000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing? 4. Why might managers at Desert Products prefer to use normal costing? Print Done Print Done
Transcribed Image Text:Desert Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Desert allocates manufacturing overhead costs using direct manufacturing labor costs. Desert provides the following information: E (Click the icon to view the information.) Read the requirements ... Requirement 1. Compute the actual and budgeted manufacturing overhead rates for 2017. (Enter your answer as a number [not as a percentage] rounded to two decimal places, X.XX.) Actual manufacturing overhead rate Budgeted manufacturing overhead rate Data Table Requirements Budget for 2017 Actual Results for 2017 Direct material costs 2,100,000 $ 2.050,000 1. Compute the actual and budgeted manufacturing overhead rates for 2017. 2. During March, the job-cost record for Job 626 contained the following information: Direct manufacturing labor costs 1,500,000 1,460,000 Direct materials used $50,000 Manufacturing overhead costs 2,775,000 2.920,000 Direct manufacturing labor costs $30.000 Compute the cost of Job 626 using (a) actual costing and (b) normal costing. 3. At the end of 2017, compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing? 4. Why might managers at Desert Products prefer to use normal costing? Print Done Print Done
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