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 38,500 58,400 89,000 39,000 $240,300 $543,120 $ 2.60 $ 4.60 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 89 130 310 66 $ 948 $1,200 $ 700 $ 980

Answer 1

Requirement 1 Molding Department Painting Department Predetermined Overhead Rate $ $ 5.30 Per MH 13.90 Per DLH Working Note: Molding Department: Estimated MFg Oh : 240300+(2.60*89000) -A $ Estimated Machine hours - B Pre determined Oh Rate - A/B $ 471,700 89000 5.30 Painting Department : Estimated MFg Oh : 543120+(58400*4.60) - A $ Estimated Direct Labour hours - B Pre determined Oh Rate - A/B $ 811,760 58400 13.90 Requirement 2 Overhead Cost $ $ 3,450 Working Note: Molding Department : 310 Machine Hours x $5.30 per MH Painting Department: 130 DLH x $13.90 Per DLH $ 1,643 $ 1,807 $ 3,450 Requirement 3(a) Direct Material Direct Labour Manfacturing Overhead Department Molding Painting Total $ 948 $ 1,200 $ 2,148 $ 700 $ 980 $ 1,680 $ 1,643 $ 1,807 $ 3,450 Total Cost $ 3,291 $ 3,987 $ 7,278 Requirement 3(b) Total Manfacturing cost (A) No of Units (B) Unit Product cost (A/B) $ 7,278 22 units $ 330.82 Note: Please comment down for any further clarifications