Multiple Departments; Applying Overhead [LO2-1, LO2-2, LO2-3, LO2-7] High Desert Pot tteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. company uses a job-order costing system in which predetermined overhead rates are used to apply nufacturing overhead cost to jobs. The predetermined overhead rate in the Molding Department is based 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 Direct labor-hours Machine-hours . Direct materials cost Direct labor cost MoldingPainting 60,000 8,000 $510,000 $650,000 $130,000 $420,000 $497,000 $615,000 12,000 70,000 . . . . . .. manufacturing overhead cost Variable manufacturing overhead per machine-hour. Variable manufacturing overhead per direct labor-hour . $1.50 $2.00