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
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 Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Department Molding 37,500 87,000 Painting $3,000 $156,600 38,000 $455,800 $ 3.00 Variable manufacturing overhead per direct labor-hour $5.00 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concernin the job: Direct labor-hours Machine-hours Direct materials Direct labor cost Required: Department Molding Painting 75 390 126 65 $ 944 $ 700 $1,280 $1,000 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 34 units, what would be the unit product cost?
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