Question

High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company uses a job-order costing system in which departmental predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours, and the rate in the Painting Department is based on direct labor-hours. At the beginning of the year, the company provided the following estimates: Department Molding Painting 34,000 89,000 $186,900 $474,300 Direct labor-hours 52,700 36,000 Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 2.80 4.80 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job: Department MoldingPainting 84 Direct labor-hours 129 Machine-hours 360 67 $ 942 $1,200 $ 690 $ 990 Direct materials Direct labor cost Required: 1. Compute the predetermined overhead rates used in the Molding Department and the Painting Department. 2. 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 34 units, what would be the unit product cost?

pls answer all parts to the question.

Answer 1

1) Calculation of Predetermined overhead rate

Molding= Total manufacturing overhead cost/Machine hours+Variable manufacturing overhead per machine hour

= $186900/89000+$2.80= $4.90 per MH

Painting= Total manufacturing overhead cost/Labor hours+Variable manufacturing overhead per direct labor hour

= $474300/52700+$4.80= $13.80 per DLH

2) Total overhead cost= 360*$4.90+129*$13.80= $3544

3)

	Department
	Molding	Painting	Total
Direct materials	$942	$1200	$2142
Direct labor	690	990	1680
Manufacturing overhead	(360*$4.90)= 1764	(129*$13.80)= 1780	3544
Total cost	$3396	$3970	$7366

4) Unit product cost= Total cost/Number of units

= $7366/34= $216.65 per unit