Question

Check my work 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 53,800 84,000 31,000 $210,000 $489,580 $ 2.80 4.RO 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 Molding Painting 86 131 69 $ 950 $1,140 $ 690 $ 990 370 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 25 units, what would be the unit product cost? in n bl. < Prev 7 of 9 Next > 4) > SVO E DOO F7 FB 20 F3 FS A * # 3 $ 4 % 5 & 7 9 0 8 6 O

Answer 1

Required 1 :
Predetermined Overhead Rate
Molding department [ ( 210000 / 84000 ) + 2.80 ] =	5.30	per MH
Painting department [ ( 489580 / 53800 ) + 4.80 ] =	13.90	per DLH

Required 2 :
Total overhead cost = ( Machine hours worked in molding department * Molding department predetermined overhead rate ) + ( Direct labor hours worked in Painting department * Painting department predetermined overhead rate )
Total overhead cost = ( 370 * 5.30 ) + ( 131 * 13.90 ) =	3782

Required 3A :
	Department
	Molding	Painting	Total
Direct materials	950	1140	2090
Direct labor	690	990	1680
Manufacturing overhead	1961 [ 370*5.30 ]	1821 [ 131*13.90 ]	3782
Total cost	3601	3951	7552

Required 3B :
Unit product cost = Total product cost / Number of units = 7552 / 25 =	302.08	per unit