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:
Molding | Painting | |
Direct Labor Hours | 31,500 | 50,700 |
Machine Hours | 88,000 | 39,000 |
Fixed Manufacturing Overhead Cost | 202,400 | 486,720 |
Variable Manufacturing Overhead per Machine-hour | 2.60 | ---- |
Variable Manufacturing Overhead per direct Labor-hour | --- | 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:
Molding | Painting | |
Direct Labor Hours | 89 | 125 |
Machine-Hours | 310 | 69 |
Direct Materials | 946 | 1,240 |
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 35 units, what would be the unit product cost?
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