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 35,500 52,700 Machine-hours 87,000 31,000 Fixed manufacturing overhead cost $ 217,500 $ 500,650 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 77 132 Machine-hours 320 68 Direct materials $ 942 $ 1,140 Direct labor cost $ 700 $ 950 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 27 units, what would be the unit product cost?
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