Question

mework 0 High Desert Patterywo Saved Help Save 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 38,800 53,900 86,000 32,000 $258,000 $485,100 $ 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: Department Molding Painting Direct labor-hours 85 126 Machine-hours 350 71 Direct materials $ 946 $1,100 Direct labor cost $ 690 $ 980 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.

Answer 1

Requirement 1:

Computation of predetermined overhead rates used in Molding department and Painting department :

Particulars	Molding	Painting
Total fixed Manufacturing overhead (A)	$ 2,58,000	$ 4,85,100
Allocation base	Number of machine hours	Number of direct labor hours
Number of Machine hours/ labor hours (B)	86,000 machine hours	53,900 Direct labor hours
Fixed overhead rate (C ) = ( A ) / ( B)	$ 3.00 ( $ 2,58,000 / 86,000 hours)	$ 9.00 ($ 4,85,100 / 53,900 hours)
Variable overhead rate (D)	$ 2.60	$ 4.60
Predetermined overhead rate (E ) = C +D	$ 5.60 ($ 3 +$ 2.60)	$ 13.60 ($ 9 + $ 4.60)

Requirement 2 :

Computation of total overhead cost applied to JOB 205 :

Total overhead cost applied =( 350 machine hours * $ 5.60) + ( 126 labor hours *$ 13.60)

Total overhead cost applied = $ 1960 + $ 1,714 ($ 1713.60 rounded off to $ 1714)

Total overhead cost applied = $ 3,674

Requirement 3 (a)

Computation of total manufacturing cost recorded for Job 205 :

Particulars	Molding	Painting	Total
Direct materials	$ 946	$ 1,100	$ 2,046
Direct labor cost	$ 690	$ 980	$ 1,670
Manufacturing overhead	$ 1,960 ( 350 hrs*$ 5.60)	$ 1,714 (126 hrs*$ 13.60)	$ 3,674
Total manufacturing cost	$ 3,596	$ 3,794	$ 7,390

Requirement 3(b):

Computation of unit product cost if the job contains 22 units :

Total manufacturing cost = $ 7,390

Number of units = 22 units

Unit product cost per unit = Total manufacturing cost / Number of units

Unit product cost per unit = $ 7,390 / 22 units

Unit product cost per unit                    = $ 336.00 ($ 335.90 rounded off to $ 336.00)

Thankyou !!!!!