Question

Return to 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 36,500 58,700 34.000 31,000 $134,400 $516 $ 5.20 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 Holding Painting Direct labor. hours Machine hours Direct materials Direct labor cost 595 $1200 2009

Answer 1

1) Molding department rate = (134400/84000+3.20) = 4.80 per MH

Painting department rate = (516560/58700+5.20) = 14 per DLH

2) Total overhead cost = (380*4.8+14*132) = 3672

3) Total Job Cost

	Molding	Painting	Total
Direct material	938	1200	2138
Direct labor	730	980	1710
Overhead	1824	1848	3672
Total	3492	4028	7520

4) Unit product cost = 7520/39 = 192.82