Solution of Cost Accounting:
Problem 4-17
Part 1:
Budgeted manufacturing overhead rate = Budgeted manufacturing overhead costs/ Budgeted direct manufacturing labor costs
= $2,700,000 / $1,500,000
= 1.80 or 180%
Actual manufacturing overhead rate = Actual manufacturing overhead costs /Actual direct manufacturing labor costs
= $2, 755, 000 / $1, 450, 000
= 1.9 or 190%
Part 2:
Costs of Job 626 under actual and normal costing as follows:
Actual Normal Costing Costing
Direct materials $ 40,000 $ 40,000
Direct manufacturing labor costs 30,000 30,000
Manufacturing overhead costs
$30,000* 1.90 =57,000 57,000
$30,000*.80 =54,000 54,000
Total manufacturing costs of Job 626 $127,000 $124,000
