Problem 2-24A Multiple Departments; Applying Overhead [LO2-1, LO2-2, LO2-3, LO2-7]

High 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 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's management made the following estimates:

	Department
	Molding	Painting
Direct labor-hours	33,500	56,200
Machine-hours	88,000	37,000
Direct materials cost	$195,000	$205,000
Direct labor cost	$271,000	$519,000
Fixed manufacturing overhead cost	$228,800	$556,380
Variable manufacturing overhead per machine-hour	$2.40	-
Variable manufacturing overhead per direct labor-hour	-	$4.40

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	73	129
Machine-hours	300	67
Materials placed into production	$940	$1,240
Direct labor cost	$710	$990

Required:

1.	Compute the predetermined overhead rate used during the year in the Molding Department. Compute the rate used in the Painting Department. (Round your answers to 2 decimal places.)

Predetermined overhead rate
Molding Department		per MH
Painting Department		per DLH
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2.	Compute the total overhead cost applied to Job 205. (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.)

Total overhead cost

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3-a.	What would be the total cost recorded for Job 205? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount.)

	Department
	Molding	Painting	Total
Direct materials			$ 0
Direct labor			0
Manufacturing overhead			0
Total cost	$ 0	$ 0	$ 0
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3-b.	If the job contained 32 units, what would be the unit product cost? (Round "Predetermined overhead rate" and final answer to 2 decimal places and other intermediate calculations to the nearest dollar amount.)

Unit product cost

per unit

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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:

	Department
	Molding	Painting
Direct labor-hours	28,000	50,000
Machine-hours	87,500	24,100
Direct materials cost	$162,000	$414,000
Direct labor cost	$108,000	$436,000
Manufacturing overhead cost	$447,100	$678,100

	What was the amount of underapplied or overapplied overhead in each department at the end of the year? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount. Select "None" for no effect (i.e., zero variance).)

Molding Department
Painting Department