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 31,000 60,000 89,000 36,000 $222,500 $546,000 $ 2.80 - - $ 4.80 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 85131 330 69 $ 938 $1,200 $ 720 $ 950 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. Req 1 Reg 1 Reg 2 Reg 3A Req 3B Compute the Predetermined Overhead Rates used in the Molding Department and the Painting Department. (Round your answers to 2 decimal places.) Predetermined Overhead Rate Molding Department per MH Painting Department per DLH

Answer 1

1) Molding department = (222500/89000+2.80) = 5.30 per MH

Painting department = (546000/60000+4.80) = 13.90 per DLH

2) Total overhead cost = (330*5.30+131*13.90) = 3569.90 or 3570

3a) Total manufacturing cost

	Molding	Painting	Total
Direct material	938	1200	2138
Direct labor	720	950	1670
Overhead	1749	1821	3570
Total	3407	3971	7378

3b) Unit product cost = 7378/22 = 335.36