Question

1. value: 10.00 points High Desert Potteryworks makes a variety of pottery products that it sells to retailers, such as Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used to apply manufacturing overhead cost to jobs. The predetermined overhead rate in the Moulding Department is based on machine-hours, and the rate in the Painting Department is based on direct labour cost. At the beginning of the year, the company's management made the following estimates: Department Direct labour-hours Machine-hours Direct materials cost Direct labour cost Manufacturing overhead cost Moulding Painting 16,250 68,500 87,0009 ,700 $527,000 $667,000 $162,500 $479,500 $896,100 $815,150 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job: Department Direct labour-hours Machine-hours Materials placed into production Direct labour cost Moulding 35 160 $460 $280 Painting 150 25 $322 $670 Required: 1. Compute the predetermined overhead rate used during the year in the Moulding Department. Compute the rate used in the Painting Department. (Round "Cost per machine-hour" answer to 2 decimal places.) Predetermined Overhead Rate per machine-hour Moulding Department Painting Department % of direct labour cost 2. Compute the total overhead cost applied to Job 205. (Do not round intermediate calculations.) Total overhead cost

Answer 1

Moulding department Doe determined Overhead rate - 1. Manufacturing overhead cost Machine - hours $ 896,100 87.000 = $10.3 per machine hour. painting department predetermined overhead date: Manufacturing overhead cost Direct labour cost $815, 150 x 100 $479,500 = 170 % of direct labos cost Job 205 : overhead applied in Moulding department = 160x$10.3 $1648 overhead applied in painting department = $690 x 190% -$1139 Total overhead Cost applied to Job 205= $1648 + $ 1139 = $2787

3-a. Total Cost for Job 205: Direct materials Direct labour Manufa Gluring overhead applied Total Cost Department Moulding Painting $460 $322 $670 $1648 $ 139 $2388 $2131 Total $782 $950 $2787 $4519 3-b. Cost per unit - $6519 = $64.56 10-3 4. Moulding department: Applied overhead = 661 700 x - $687,010 Actual overhead = $699,710 = $ 12,700 underapplied 70%. Painting department: Applied overhead = $453,000 + = $770,100 Actual overhead = $753,500 =) $ 16,600 Overappliedy