PROBLEM 2–19 Multiple Predetermined Overhead Rates;

Applying Overhead LO2–1, LO2–2, LO2–4 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:

Department Molding Painting

. . . . . . . . . . . . . 12,000 60,000

. . . . . . . . . . . . . . . 70,000 8,000

$497,000 $615,000

$1.50 –

– $2.00 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

. . . . . . . . . . . . . . . 30 84 Department Molding Painting . . . . . . . . . . . . . . . . . 110 20 . . . . . . . . . . . . . . . . . $770 $1,332 . . . . . . . . . . . . . . . . $525 $1,470 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. What would be the total manufacturing cost recorded for Job 205? If the job contained 50 units, what would be the unit product cost?