Question
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 Moulding Department is based on machine-hours, and the rate in the Painting Department is based on direct labour cost. At the beginning of the year, the companys management made the following estimates
Job 205 was started on August 1 and completed on August 10. The companys cost records show the following information concerning the job:
1. Compute the predetermined overhead rate used during the year in the Moulding Department. Compute the rate used in the Painting Department. (Round "Cost per machine-hour" answer to 2 decimal places.)
2. Compute the total overhead cost applied to Job 205. (Do not round intermediate calculations. Enter your answer rounded to the nearest whole dollar.)
3-a. What would be the total cost recorded for Job 205? (Do not round intermediate calculations. Enter your answers rounded to the nearest whole dollar.)
3-b. If the job contained 60 units, what would be the cost per unit? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
4. At the end of the year, the records of High Desert Potteryworks revealed the following actual cost and operating data for all jobs worked on during the year:
What was the amount of under- or overapplied overhead in each department at the end of the year? (Do not round intermediate calculations.)
Direct labour-hours Machine-hours Direct materials cost Direct labour cost Manufacturing overhead cost Department Moulding Painting 15, 250 66,500 83,000 9,300 $ 523,000 $ 663,000 $ 152,500 $ 465,500 $ 821,700 $ 791,350 Direct labour-hours Machine-hours Materials placed into production Direct labour cost Department Moulding Painting 35 110 120 25 $ 490 $ 352 $ 310 $ 700 Predetermined Overhead Rate 9.90 per machine-hour $ Moulding Department Painting Department 170 % of direct labour cost Total overhead cost $ 2,378 Department Moulding Painting Total Direct materials Direct labour Manufacturing overhead applied Total cost $ 0 $ 0 $ 0 Cost per unit Direct labour-hours Machine-hours Direct materials cost Direct labour cost Manufacturing overhead cost Department Moulding Painting 11,300 63,300 66,300 10,300 $ 443,000 $ 693,000 $ 121,000 $ 449,000 $ 668,670 $ 781,375 overhead Moulding Department Painting Department overheadStep by Step Solution
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