Question

The Granger Company uses a job-costing system at its Dover, Delaware, plant. The plant has a machining department and a finishing department. Granger 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 2017 budget for the plant is as follows: (Click the icon to view the 2017 budget.) Read the requirements. Requirement 1. Identify the components of the overview diagram of Granger's job-costing system. (Abbreviations used: Manuf. = Manufacturing.)

Answer 1

1.

A	Indirect cost pool
B	Machining department overhead
C	Finishing department overhead
D	Cost allocation base
E	Machine-hours
F	Direct mfg. labor costs
G	Cost object:
H	Indirect costs
I	Direct costs
J	Direct costs
K	Direct materials
L	Direct mfg. labor

2.

	Machining Department	Finishing Department
Manufacturing overhead costs $	10070000	8034000
Machine-hours	190000
Direct manufacturing labor costs $		4120000
Budgeted manufacturing overhead rate $	53	1.95
	per machine-hour	per direct labor dollar

3.

	Job 431
Machining department overhead ($53 x 160)	8480.00
Finishing department overhead ($1.95 x $1350)	2632.50
Total manufacturing overhead cost allocated $	11112.50

Kindly round off as required since no instructions have been provided with the question regarding rounding off.

4.

	Job 431
Direct materials ($15500 + $3500)	19000
Direct manufacturing labor ($700 + $1350)	2050
Manufacturing overhead	11112.50
Total job cost $	32162.50
Number of units	300
Cost per unit $	107.21

Kindly round off as required since no instructions have been provided with the question regarding rounding off.

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