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 | 31,500 | 57,000 | |
Machine-hours | 87,000 | 34,000 | |
Fixed manufacturing overhead cost | $ 234,900 | $ 530,100 | |
Variable manufacturing overhead per machine-hour | $ 2.40 | 0 | |
Variable manufacturing overhead per direct labor-hour | 0 | $ 4.40 |
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 | 79 | 131 | |
Machine-hours | 300 | 72 | |
Direct materials | $ 940 | $ 1,180 | |
Direct labor cost | $ 730 | $ 1,010 |
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 30 units, what would be the unit product cost?
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