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 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's management made the following estimates: |
Department | ||
Molding | Painting | |
Direct labor-hours | 31,500 | 55,100 |
Machine-hours | 87,000 | 34,000 |
Direct materials cost | $185,000 | $195,000 |
Direct labor cost | $277,000 | $527,000 |
Fixed manufacturing overhead cost | $200,100 | $528,960 |
Variable manufacturing overhead per machine-hour | $2.80 | - |
Variable manufacturing overhead per direct labor-hour | - | $4.80 |
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 | 83 | 132 |
Machine-hours | 340 | 74 |
Materials placed into production | $934 | $1,260 |
Direct labor cost | $700 | $980 |
Required: |
1. | Compute the predetermined overhead rate used during the year in the Molding Department. Compute the rate used in the Painting Department. (Round your answers to 2 decimal places.) |
2. | Compute the total overhead cost applied to Job 205. (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.) |
3-a. | What would be the total cost recorded for Job 205? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.) |
3-b. | If the job contained 37 units, what would be the unit product cost? (Round "Predetermined overhead rate" and final answer to 2 decimal places and other intermediate calculations to the nearest dollar amount.) |
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: |
Department | ||
Molding | Painting | |
Direct labor-hours | 33,000 | 53,000 |
Machine-hours | 86,500 | 24,700 |
Direct materials cost | $164,900 | $412,000 |
Direct labor cost | $108,000 | $436,000 |
Manufacturing overhead cost | $452,150 | $725,700 |
What was the amount of underapplied or overapplied overhead in each department at the end of the year? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount. Select "None" for no effect (i.e., zero variance).) | |
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