Clear View is a manufacturer of custom windows and uses ajob-costing system at its Orlando, FL plant. The plant has amachining department and a finishing department. Clear View usesnormal costing with two direct-cost categories (direct materialsand direct manufacturing labor) and two manufacturing overhead costpools (the machining department with machine-hours as theallocation base and the finishing department with directmanufacturing labor costs as the allocation base). The 2014 budgetfor the plant is as follows:
| Machining Department | Finishing Department | |
| Manufacturing overhead costs | $9,065,000 | $8,181,000 |
| Direct manufacturing labor costs | $ 970,000 | $4,050,000 |
| Direct manufacturing labor-hours | 36,000 | 155,000 |
| Machine-hours | 185,000 | 37,000 |
Prepare an overview diagram of Clear View’s job-costingsystem.
What is the budgeted manufacturing overhead rate in themachining department? In the finishing department?
During the month of January, the job-cost record for Job 431shows the following:
| Machining Department | Finishing Department | |
| Direct materials used | $13,000 | $ 5,000 |
| Direct manufacturing labor costs | $ 900 | $ 1,250 |
| Direct manufacturing labor-hours | 20 | 70 |
| Machine-hours | 140 | 20 |
Compute the total manufacturing overhead cost allocated to Job431.
Assuming that Job 431 consisted of 300 units of product, what isthe cost per unit?
Amounts at the end of 2014 are as follows:
| Machining Department | Finishing Department | |
| Manufacturing overhead incurred | $10,000,000 | $7,982,000 |
| Direct manufacturing labor costs | $ 1,030,000 | $4,100,000 |
| Machine-hours | 200,000 | 34,000 |
Compute the under- or overallocated manufacturing overhead foreach department and for the Dover plant as a whole.
Why might Clear View use two different manufacturing overheadcost pools in its job-costing system?
Expert Answer
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