Actual costing normal costing accounting for manufacturing overhead. Destin Products uses a job-costing system with two direct-cost categories (direct materials and direct manufacturing labor) and one manufacturing overhead cost pool. Destin allocates manufacturing overhead costs using direct manufacturing labor costs. Destin provides the following information:
Budget for 2011 Actual Results for 2011
Direct material costs $2000000 $1900000
Direct manufacturing labor costs 1500000 1450000
Manufacturing overhead costs 2700000 2755000
Compute the actual and budgeted manufacturing overhead rates for 2011.
During March the job-cost record for Job 626 contained the following information:
Direct materials used $40000
Direct manufacturing labor costs $30000
Compute the cost of Job 626 using (a) actual costing and (b) normal costing.
At the end of 2011 compute the under- or overallocated manufacturing overhead under normal costing. Why is there no under- or overallocated overhead under actual costing?
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