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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
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:
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 companys management made the following estimates Depart ment Molding Painting 30,500 57,700 Direct labor-hours Machine-hours 89.000 38.000 Direct materials cost $193,000 $203,000 Direct labor cost $290,000 $526,000 Fixed manufacturing overhead cost $204,700 $501,990 Variable manufacturing overhead per $3.00 machine-hour Variable manufacturing overhead per direct S5.00 labor-hour 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 78 125 Machine-hours 350 Materials placed into $938 $1,160 production $750 $990 Direct labor cost 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.) Predetermined overhead rate per MH Molding Department Painting Department per DLH 2. Compute the total overhead cost applied to Job 205. ound "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.) Total overhead costStep by Step Solution
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