Reference no: EM132632692

TinBrass products manufactures industrial grade waterflow systems and uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor).

TinBrass allocates all manufacturing overhead costs using direct manufacturing labor costs and a single plantwide overhead rate. TinBrass provides the following information:

                                                         Budget for 2019                                Actual Results for 2019

Direct material costs                     $4,000,000                                         $3,800,000

Direct manufacturing labor costs         1,500,000                                        1,450,000

Manufacturing overhead costs               5,400,000                                     5,510,000

Problem 1. Compute the predetermined overhead rate and the actual rate (calculated with actual performance numbers)

Problem 2. During August, the plant controller recorded the following information for job M-347 in its job cost sheet:

Direct materials used $80,000

Direct manufacturing labor costs $60,000

Compute the cost of job M-347 using (a) a normal cost system and (b) an actual cost system.

Problem 3. Compute the under or overallocation of overhead under the normal and the actual cost system.