Question

Problem 2-24A Multiple Departments; Applying Overhead [LO2-1, LO2-2, LO2-3, LO2-7]

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 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's management made the following estimates:

	Department
	Molding	Painting
Direct labor-hours	37,000	54,900
Machine-hours	86,000	37,000
Direct materials cost	$188,000	$198,000
Direct labor cost	$277,000	$530,000
Fixed manufacturing overhead cost	$240,800	$477,630
Variable manufacturing overhead per machine-hour	$2.80	-
Variable manufacturing overhead per direct labor-hour	-	$4.80

   

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	132
Machine-hours	350	69
Materials placed into production	$932	$1,300
Direct labor cost	$720	$950

   

Required:

1.

Compute the predetermined overhead rate used during the year in the Molding Department. Compute the rate used in the Painting Department. (Round your answers to 2 decimal places.) HOME ACCESSIBILITY PREVIEW Predetermined overhead rate Molding Department per MH Painting Department per DLH + The full content of this question did not transfer to your assignment. Please try again. reload 2. Compute the total overhead cost applied to Job 205. (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.) HOME ACCESSIBILITY PREVIEW Total overhead cost + The full content of this question did not transfer to your assignment. Please try again. reload 3-a. What would be the total cost recorded for Job 205? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.) HOME ACCESSIBILITY PREVIEW Department Molding Painting Total Direct materials Direct labor Manufacturing overhead Total cost + The full content of this question did not transfer to your assignment. Please try again. reload 3-b. If the job contained 21 units, what would be the unit product cost? (Round "Predetermined overhead rate" and final answer to 2 decimal places and other intermediate calculations to the nearest dollar amount.) HOME ACCESSIBILITY PREVIEW Unit product cost per unit + The full content of this question did not transfer to your assignment. Please try again. reload 4. At the end of the year, the records of High Desert Potteryworks revealed the following actual cost and operating data for all jobs worked on during the year:       Department    Molding Painting   Direct labor-hours 29,000      50,000        Machine-hours 85,700      24,800        Direct materials cost $160,700      $419,000        Direct labor cost $108,000      $436,000        Manufacturing overhead cost $490,620      $638,900      What was the amount of underapplied or overapplied overhead in each department at the end of the year? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount. Select "None" for no effect (i.e., zero variance).) HOME ACCESSIBILITY PREVIEW Molding Department Painting Department + The full content of this question did not transfer to your assignment. Please try again. reload

Answer 1

Part 1: Molding Painting Particulars A Fixed manufacturing overhead cost$240.800 $477.630 Variable manufacturing overhead B Cost: $240,800 Molding-S2.8*86,000 Painting- S4.8*54,900 S263,520 $741,150 C | Total Manufacturing overhead=a+b| S481.600| Predetermined overhead rate for Molding department Total overhead cost Total Mac hours - S481,600 86,000 Predetermined overhead rate for molding department - $5.60 per machine hour Predetemined ovethead rate for painting department - Total ovethead cost/Total labor hours -$741,150/54,900 Predetermined overhead rate for painting department S13.50 per labor hour

Part 2: Total overhead cost applied to Job 205 S1,960 + S1,782 Total overhead cost applied to Job 205- S3,742 (from above table in part 3a) Part 3(a): Computation of total cost for Job 205: Particulars Molding Painting Total S932 $720 $1,300 $950 $2,232 $1,670 A Direct Material Direct Labor Manufacturing overhead Molding-S5.6 350 Painting S13.50 132 $1,960 $1,782 Total -a tb +c S3.612 S4,032 S7,644 Total cost for Job 205- S7,644 Part 3(b): Unit product cost of Job 205 Total cost /no. of units S7,644/21 S364 per unit