Question

High Desert Potterworks 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 38,00 55,300 81,00 34,eee $170,100 $492,178 $ 2.80 - $ 4.89 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following Information concerning the job: 73 Direct labor-hours Machine-hours Direct materials Direct labor cost Department Molding Painting 127 379 $ 948 $1,280 $ 749 $ 990

Answer 1

Predetermined overhead rate:
Molding	4.90	=2.8+(170100/81000)
Painting	13.70	=4.8+(492170/55300)
Overhead applied:
Molding	1813	=370*4.90
Painting	1740	=127*13.70
1
	Department
	Molding	Painting	Total
Direct materials	948	1280	2228
Direct labor	740	990	1730
Manufacturing Overhead	1813	1740	3553
Total cost	3501	4010	7511
2
Total cost	7511
Divide by units	28
Unit product cost	268.25	per unit