The Holden Company uses a job-costing system at its Sydney, Ashfield plant

Manufacturing overhead, Job costing and budgeted rates

The Holden Company uses a job-costing system at its Sydney, Ashfield plant. The plant has a machining department and a finishing department. Holden 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 2013 budget for the plant is as follows:

Required:

1. Prepare an overview diagram of Holden’s job-costing system. (8 Marks)Required

2. What is the budgeted manufacturing overhead rate in the machining department? In the finishingdepartment?(4 Marks)

3. During the month of January, the job-cost record for Job 369 shows the following:

Compute the total manufacturing overhead cost allocated to Job 369.(4 Marks)

4. Assuming that Job 369 consisted of 600 units of product, what is the cost per unit?(10 Marks)

5. Amounts at the end of 2013 are as follows:

Compute the under-or over allocated manufacturing overhead for each department and for the Sydney plant as a whole.(10 Marks)

6. Why might Holden use two different manufacturing overhead cost pools in its job-costing system?(4 Marks)