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Problem 2-19 (Algo) Multiple Predetermined Overhead Rates; Applying Overhead [LO2-1, LO2-2, LO2-4] High Desert Potteryworks makes a variety of pottery products that it sells
Problem 2-19 (Algo) Multiple Predetermined Overhead Rates; Applying Overhead [LO2-1, LO2-2, LO2-4] 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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Molding 33,000 89,000 $222,500 $2.20 Painting 52,700 31,000 $ 490,110 $4.20 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 Machine-hours Direct materials 84 300 $ 936 133 75 $1,260 Direct labor cost $740 $970 4 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 33 units, what would be the unit product cost?
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