Question

HW 2 6 Saved Help Save & Exit Submit 10 Check my work 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 Department Molding Painting Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable nanufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 56, 200 39,000 $234,900 $517,040 31,000 81,000 Book $ 2.60 -$4.60 Print Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning oferencesthe job: MoldingPainting Direct labor-hours Machine-hours Direct materials Direct labor cost 127 68 $ 946 $1,120 $ 720 980 80 380 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 30 units, what would be the unit product cost?

Answer 1

1	Predetermined overhead rate
	Molding Department
	Fixed manufacturing overhead cost (234,900/81,000)=					2.9
	Variable manufacturing overhead rate per machine hour					2.6
	Predetermined overhead rate					5.5	per MH's
	Painting Department
	Fixed manufacturing overhead cost (517040/56200)=					9.2
	Variable manufacturing overhead rate per machine hour					4.6
	Predetermined overhead rate					13.8	per DLH
2)	total overhead cost applied ot job 205
					Molding	painting	total
	Molding	(380*5.5)			2090		2090
	Painting	(127*13.8)				1753	1753
	total				2090	1753	3843
	total overhead cost applied to job 205				3843
3-a)	total manufacturing cost
					Molding	painting	total
	Direct materials				946	1120	2066
	Direct labor cost				720	980	1700
	overhead cost applied				2090	1753	3843
	total				3756	3853	7609
	total manufacturing cost			$7,609
3-b)	unit product cost =		7609/30
			253.63