Answer:
Explanation:
Normal costing Actual costing
Assembly support cost $8,800,000 $8,400,000
Direct labor hours 220,000 200,000
Indirect Cost Rate $40 per DLH $42 per DLH
2.
Normal Costing Laguna Model Mission Model
Construction period Feb-June 2017 May-0ct 2017
Direct material costs $106,550 $127,450
Direct labor costs $ 36,250 $41,130
Direct labor-hours 970 1,000
Assmebly support cost $38,800
($40 x 970) $40,000
Total job cost $181,600 $208,580
Actual Costing Laguna Model Mission Model
Construction period Feb-June 2017 May-0ct 2017
Direct material costs $106,550 $127,450
Direct labor costs $ 36,250 $41,130
Direct labor-hours 970 1,000
Assmebly support cost $40,740
($42 x 970) $42,000
Total job cost $183,540 $210,580
Companies now do prefer normal costing than the actual costing, reasons are that the overhead rates are been known from the beginning of the year which is important for giving price estimates and checking the profitability of jobs.
