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- Download: https://solutionzip.com/downloads/solomon-company/
- The Solomon Company uses a job costing system at its Dover, Delaware plant. The plant has a machining department. Its job costing system has two direct cost categories (direct materials and direct manufacturing labour) and two manufacturing overhead cost pools (the machining department, allocated using machine hours and the finishing department, allocated using manufacturing labour costs). The 2002 budget for the plant is:
- Machining Dept. Finishing Dept.
- Manufacturing Overhead $10,000,000 $8,000,000
- Direct manufacturing labour cost $900,000 $4,000,000
- Direct manufacturing labour hours 30,000 160,000
- Machine hours 200,000 33,000
- (a) What is the budgeted overhead rate that should be used in the machining department? In the finishing department?
- (b) During the month of January, the cost record for job 431 shows the following:
- Machining Dept. Finishing Dept.
- Direct materials used $14,000 $3,000
- Direct manufacturing labour costs $600 $1,250
- Direct manufacturing labour hours 30 50
- Machine hours 130 10
- What is the total manufacturing overhead allocated to job 431?
- (c) Assuming that job 431 consisted of 20 units of product, what is the unit product cost?
- (d) Balances at the end of 2002 are as follows:
- Machining Dept. Finishing Dept.
- Manufacturing overhead incurred $11,200,000 $7,900,000
- Direct manufacturing labour costs $950,000 $4,100,000
- Machine hours 220,000 32,000
- Compute the manufacturing overhead variance for each department and for the Dover plant as a whole.
- Download: https://solutionzip.com/downloads/solomon-company/
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