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: 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 36,000 55.100 85.000 32.000 $170,000 $462,840 $ 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 coat Department Molding Paipting 7131 380 $ 932 $1. 120 $ 730 $ 980 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 22 units, what would be the unit product cost? Complete this question by entering your answers in the tabs below. < Prex 3 of 5 Next >

Answer 1

1) Molding department overhead rate = 170000/85000+3 = 5 per machine hour

Painting department overhead rate = 462840/55100+5 = 13.40 per labor hour

2) Overhead applied = (380*5+131*13.40) = 3655.40

3) Total manufacturing cost

Direct material (932+1120)	2052
Direct labor	1710
Overhead	3655.40
Total manufacturing cost	7417.40

4) Unit cost = 7417.40/22 = 337.15