Question
igh 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
igh 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 company's management made the following estimates:
DepartmentMouldingPaintingDirect labour-hours14,00064,000Machine-hours78,0008,800Direct materials cost$518,000$658,000Direct labour cost$140,000$448,000Manufacturing overhead cost$733,200$784,000
Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job:
DepartmentMouldingPaintingDirect labour-hours30160Machine-hours17020Materials placed into production$440$302Direct labour cost$260$650
Required:
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 70 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:DepartmentMouldingPaintingDirect labour-hours10,80062,800Machine-hours65,8009,800Direct materials cost$438,000$688,000Direct labour cost$116,000$444,000Manufacturing overhead cost$630,320$752,000
What was the amount of under- or overapplied overhead in each department at the end of the year?(Do not round intermediate calculations.)
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