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
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 Direct labor-hours 34,500 54,300 Machine-hours 87,000 34,000 Fixed manufacturing overhead cost $ 208,800 $ 472,410 Variable manufacturing overhead per machine-hour $ 3.00 0 Variable manufacturing overhead per direct labor-hour 0 $ 5.00 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 Direct labor-hours 89 133 Machine-hours 370 70 Direct materials $ 946 $ 1,240 Direct labor cost $ 730 $ 1,000
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 38 units, what would be the unit product cost?
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