Question

Problem 3-19 (Algo) Multiple Predetermined Overhead Rates; Applying Overhead (LO3-1, LO3-2, LO3-4] 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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Molding Painting 37,000 54,100 81,000 31,000 $ 178,200 $476,080 $ 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: Direct labor-hours Machine-hours Direct materials Direct labor cost Department MoldingPainting 75127 38068 $ 950 $1,300 $ 700 $ 990

Answer 1

1) Molding department = (178200/81000+3) = 5.20 per MH

Painting department = (476080/54100+5) = 13.80 per DLH

2) Total overhead cost = (380*5.20+127*13.80) = 3728.60 or 3729

3a) Total manufacturing cost

	Molding	painting	Total
Direct material	950	1300	2250
Direct labor	700	990	1690
Overhead	1976	1753	3729
Total	3626	4043	7669

3b) Unit product cost = 7669/24 = 319.54