Interesting Figures Company produces porcelain figurines
Problem 2: Job Costing Problem
Interesting Figures Company produces porcelain figurines. The production is semi-automated where the figurines are molded almost entirely by machines only, and then the figurines are hand painted. The company uses a normal costing system and possesses two direct cost categories as well as two manufacturing overhead cost pools; the Molding Department uses machine-hours as its allocation base, and the Painting Department uses direct manufacturing labor-hours as its allocation base.
| The 2016 Budget is as follows: | |||||||
| Molding Department | Painting Department | ||||||
| Manufacturing Overhead Costs | $ 6,200,000 | $ 4,450,000 | |||||
| Direct Manufacturing Labor costs | $ 860,000 | $ 3,500,000 | |||||
| Direct Manufacturing Labor hours | 35,800 | 125,000 | |||||
| Machine-hours | 129,000 | ||||||
| Question 1: What is the budgeted MOH rate in the Molding Dept? | $ 48.06 | ||||||
| Question 2: What is the budgeted MOH rate in the Painting Dept? | 127% | ||||||
| Given #3: During the month of May 2016, note the following costs | |||||||
| for Job#52016. | |||||||
| Molding Department | Painting Department | Total | |||||
| Direct Materials used: | $ 325,000 | $ 83,000 | |||||
| Direct Manufacturing Labor Costs | $ 71,500 | $ 290,000 | |||||
| Direct Manufacturing Labor hours | 2,980 | 10,360 | |||||
| Machine-hours | 10,600 | ||||||
| Question 3a: Determine the Manufacturing Overhead Costs allocated | $ 509,457 | $ 368,714 | $ 878,172 | ||||
| in May 2016 to each Department as well as Total MOH costs. | |||||||
| Question 3b: Determine the total costs for May 2016 for each | $ 905,957 | $ 741,714 | $ 1,647,672 | ||||
| Department as well as the Total Costs for both Departments. | |||||||
| Given #4: | Actual | ||||||
| Actual total MOH costs for both Departments for 2016: | $ 11,350,000 | ||||||
| Actual total machine-hours for 2016: | 131,000 | ||||||
| Acutal total direct labor hours for 2016: | 157,000 | ||||||
| Molding Department | Painting Department | Total | |||||
| Question 4: Determine the total allocated MOH costs for each | $ 6,296,124 | $ 199,614 | $ 6,495,738 | ||||
| department and the total for 2016? | |||||||
| Question 5a: Given the total allocated MOH cost for 2016, determine whether | MOH | ||||||
| manufacturing is over-or under-allocated. | $ 11,350,000 | $ 6,495,738 | |||||
| $ 4,854,262 | |||||||
| Question 5b: If the over- or under-allocated MOH costs for 2016 is | COGS | $ 4,854,262 | |||||
| written off completely to COGS, prepare the year-end journal Entry | MOH | $ 4,854,262 | |||||
| and the T-account for MOH. | |||||||
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