Question

Check my 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: points Direct labor-hours Machine-hour's Fixed manufacturing overhead cost variable manufacturing overhead per machine hour Variable manufacturing overhead per direct labor-hour Department Molding Painting 34. eee $1,000 85,000 36,00 $187.000 $438,00 $ 3.00 $ 5.00 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following Information concerning the job: References Direct labor-hours Machine-hours Direct materials Direct labor cost Department Moldingpainting 89 131 320 71 $946 $1,160 5 720 $ 988 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 2052 3.b. If the job contained 32 units, what would be the unit product cost? Complete this question by entering your answers in the tabs below. Reg 1 Req 3A Req 38 Compute the total head 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.) Total overhead cost

Answer 1

Answer 1:

Molding department Paining department Predetermined Overhead Rate $5.20 Per machine hour $13.60 Per labor hour

Working:

Predetermined overhead rate used in molding department = Estimated manufacturing overhead cost / Estimated machine hours + Variable manufacturing overhead cost per machine hour

= 187000 / 85000 + 3

= 2.20 + 3

= $5.20 per machine hours

Predetermined overhead rate used in painting department = Estimated manufacturing overhead cost / Estimated direct labor hours + Variable manufacturing overhead cost per direct labor hour

= 438600 / 51000 + 5

= 8.60 + 5

= $13.60 per machine hours

Answer 2:

Total overhead cost $3,446

Overhead cost applied to Job 205 = Machine hours in molding department * Overhead rate for molding department + Direct labor hours in paining department + Overhead rate for paining department

= 320 * 5.20 + 131 * 13.60

= $3446

Answer 3 (a):

Direct material Direct labor Manufacturing Overhead Total cost Department Molding Paining Total $946.00 $1,160.00 $2,106.00 $720.00 $980.00 $1,700.00 $1,664.00 $1,781.60 $3,445.60 $3,330 $3,922 $7,252

Answer 3 (b):

Unit product cost Unit product cost $226.63 Per unit $126.63 |Per unit

Unit product cost = 7252 / 32 = $226.63