Question

High desert potteryworks makes a variety ofpottery products that it sells to retailers. The company uses a job -order costing system in which departmental predetemined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the molding departmen is based on machine-hours, and the rate in the painting department is based on direct labor-hours. at hte beginning of the year, the company provided the ollowing estimates. department

Molding Painting

direct labor-hours 37,000 53,400 machine -hours 84,000    37,000 fixed manufacturing overhead cost $ 210,000 $ 534,000 variable manufacturing overhead per machine-hour $ 2.20 - variable manufacturing overhead per direct labor-hour - $ 4.20 job 205 was started on august 1 and completed on august 10. The company's cost records show the following information concerning the job.

Compute the total overhead cost applied to Job 205. (Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the nearest dollar amount.)

department Molding Painting direct labor-hours 89 126 machien-hours 360 73 direct materials $ 948 $ 1,120 direct labor cost $ 690 $ 960 compute the total overhead cost applied to job 205. 3 a. what would be the total manufacturing cost recorded for job 205? 3 b. if the job contained 30 unit, what would be the unit product cost?

need better answer not undersand the excrl example

Answer 1

Solution:

Computation of overhead rate
Particulars	Molding	Painting
Fixed overhead costs	$210,000.00	$534,000.00
Variable overhead costs	$184,800.00	$224,280.00
Total overhead	$394,800.00	$758,280.00
Allocation base	Machine hour	Labor hour
Quantity of allocation base	84000	53400
Overhead rate per machine hour / labor hour	$4.70	$14.20

Computation of overhead applied to Job 205
Particulars	Amount
Overhead applied - Molding	$1,692
Overhead applied - Painting	$1,789
Total	$3,481

Computation of manufacturing cost - Job 205
Particulars	Molding	Painting	Total
Direct materials	$948	$1,120	$2,068
Direct labor	$690	$960	$1,650
Manufacturing overhead	$1,692	$1,789	$3,481
Total costs	$3,330	$3,869	$7,199

Computation of unit product cost of Job 205
Particulars	Amount
Total costs	$7,199
Nos of units produced	30
Unit product cost	$239.97