Question: Job costing, accounting for manufacturing overhead, budgeted rates. The Solomon Company uses a job-costing system at its Dover, Delaware, plant. The plant has a machining department and a finishing department. Solomon 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 2017 budget for the plant is as follows:
1. Prepare an overview diagram of Solomon's job-costing system.
2. What is the budgeted manufacturing overhead rate in the machining department? In the finishing department?
3. During the month of January, the job-cost record for Job 431 shows the following:
Compute the total manufacturing overhead cost allocated to Job 431.
4. Assuming that Job 431 consisted of 400 units of product, what is the cost per unit?
5. Amounts at the end of 2017 are as follows:
Compute the under- or overallocated manufacturing overhead for each department and for the Dover plant as a whole.
6. Why might Solomon use two different manufacturing overhead cost pools in its job-costing system?