Clear View is a manufacturer of custom windows and uses a job-costing system at its Orlando, FL plant. The plant has a machining department and a finishing department. Clear View 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 2014 budget for the plant is as follows: Machining DepartmentFinishing Department
Manufacturing overhead costs$9,065,000$8,181,000
Direct manufacturing labor costs$ 970,000$4,050,000
Direct manufacturing labor-hours36,000155,000
Machine-hours185,00037,000
Prepare an overview diagram of Clear View's job-costing system.
What is the budgeted manufacturing overhead rate in the machining department? In the finishing department?
During the month of January, the job-cost record for Job 431 shows the following:
Machining DepartmentFinishing Department
Direct materials used$13,000$ 5,000
Direct manufacturing labor costs$ 900$ 1,250
Direct manufacturing labor-hours2070
Machine-hours14020
Compute the total manufacturing overhead cost allocated to Job 431.
Assuming that Job 431 consisted of 300 units of product, what is the cost per unit?
Amounts at the end of 2014 are as follows:
Machining DepartmentFinishing Department
Manufacturing overhead incurred$10,000,000$7,982,000
Direct manufacturing labor costs$ 1,030,000$4,100,000
Machine-hours200,00034,000
Compute the under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole.
Why might Clear View use two different manufacturing overhead cost pools in its job-costing system?