Acct2102 Tutorial 3 Actual costing/normal costing Allocating manufacturing overheads Journal entries for job costing Ending work in process Prorata overhead Textbook questions for this tutorial: 4-22 1.Calculate the actual and budgeted manufacturing overhead rates Budgettedmanufacting overhead costs Budgetted manufacturiglabour costs 3,294,000 1,830,000 =1.8=1.8% Actualmanufactingoverhead costs Budgettedmanufacturiglabour costs 3,780,000 2,250,000 =1.68=1.68% 2. ActualNormal Direct materials$73,500$73,500 Direct labour$51,000$51,000 O/H $51,000 x 180%$51,000 x 168%$85,680 $91,800 $210,180$216,300 3.Normal: Actual labour costs for the year xBudgeted O/H rate $2,250,000 x 1.8 = $4,050,000 Compare the Normal vs the Actual $4,050,000-$3,780,000 = $270,000 overallocated
4.Why would they prefer to use normal costing? Normal costing is preferred because at the beginning of the year the estimate of the cost of a job is as soon as it is completed whereas with actual it can only be completed at the end of the year. 4-25 1.Calculate the O/H rate for each department Machine department O/H: 1,800,000 50,000 =$36per machinehour Assembly department O/H: 3,600,000 200,000 =$72per hour 2.Machine department 2000 hours x $36 hr = $72,000 Assembly dept 180% x $15,000 = $27,000 Total manufacturing O/H alloc. Job 494 = $99,000 3. MachiningAssembly Actual manufactirng O/H$2,100,000$3,700,000 55000 hrs x $26$2,200,000 x 180%1,980,000-- 3,960,000 Under/ (over)$120,000($260,000) 4-29 Part 2 (1)$$ DrMaterials control800 CrA/c's payable control800 (2) DrWIP (work in progress) control710 CrMats. Control (materials)710
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