Managerial Accounting Chapter 2 Test Review Arizona Pottery Works makes a variety of pottery products that it sells to retailers like Home Depot. The company uses a job-order costing system in which predetermined overhead rates are used to apply manufacturing overhead 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 cost. At the beginning of the year, the company made the following estimates: Department Direct Labor Hours Machine-Hours Direct Material Cost Direct Labor Cost Manufacturing Overhead Cost Molding Painting 70,000 12,000 60,000 8,000 $510,000 $650,000 $130,000 $420,000 $602,000 $735,000 1. Compute the predetermined overhead rate used during the year in the molding department POHR = 602,600 701000 (-8.6 2. Compute the predetermined overhead rate used during the year in the Painting department Polt A 5 7361000 420000, 7 1.75. Job 205 was started on August 1 and completed August 10. The company's cost records show the following information concerning the job: Direct Labor Hours Machine-Hours Direct Material Cost Direct Labor Cost Department Molding Painting 30 85 110 20 $470 $332 $290 $680 Compute the total overhead cost applied to Job 205. 8.6X110 68011-25 = 940 1140 2136 8. 5. 21ow: hood 4. What would be the total cost recorded for Job 205 (DM+DL+Mfg-OH)? +33 +290 +680 +2136 3908 If the job contained 50 units, what would be the unit product cost? 3904/5 28.16. At the end of the year, the records of Arizona Pottery Works revealed the following actual cost- and operating data for all jobs worked during the year Direct Labor Hours Machine-Hours Direct Material Cost Direct tabor Cost Manufacturing Overhead Cost 6. Department Molding Painting 10,000 62,000 9,000 lonely 65,000 $430,000 $680,000 $108,000 $436,000 $570,000 $750,000 What was the amount of applied overhead in the Molding Department? 86 5000 554009 7. What was the amount of applied overhead in the Painting Department? 1.75X 436,000 = 7631000 How much under- or overapplied overhead was in each department (Molding and Painting) at the end of the year? M 606 11,000 13,000