High Desert Potteryworks makes a varlety of pottery products that It sells to re

Question

High Desert Potteryworks makes a varlety of pottery products that It sells to retallers. The compeny 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 estlmates Direct labor-houra Machine-houre Pixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 30,000 53,500 89,000 36,000 $240,300 $492,200 $ 2.20 -$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: rtment MoldingPainting Direct labor-hours Machine-hours Direct materials Direct labor cost 129 67 942 $1,240 $ 730 $1,010 76 370 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 36 units, what would be the unit product cost? Complete this question by entering your answers in the tabs below Req 1 Req 2 Req 3A Req 38 Compute the Predetermined Overhead Rates used in the Molding Department and the Painting Department. (Round your answers to 2 decimal places.) Rate Molding Department Painting Department 4.90 per MH S 13.40 per DLH

Explanation / Answer

1) Predetermined Overhead Rate :-

Molding :-

= (Fixed Manufacturing Overhead + Variable Manufacturing Overhead)/Total Machine Hours

= ($240300 + (89000*$2.2)) / 89000

= ($240300 + $195800) / 89000

= $436100 / 89000

= $4.9 per machine hour

Painting :-

= (Fixed Manufacturing Overhead + Variable Manufacturing Overhead)/ Total Machine Hours

= ($492200 + (36000*$4.2)) / 36000

= ($492200 + $151200)/36000

= $643400 / 36000

= $17.87 per machine hour

2) Total Overhead Cost Applied to Job 205 :-

= Molding Overhead Cost + Painting Overhead Cost

= $1813 + $1197

= $3010

Molding Overhead Cost :-

= 370 Machine Hour * $4.9

= $1813

Painting Overhead Cost :-

= 67 Machine Hour * $17.87

= $1197

3a) Total Cost Recored for Job 205 :-

3b) Unit Product Cost = Total Manufacturing Cost / No. of units in the Job

= $6932 / 36

= $192.56 per unit

Particulars Molding Painting Total Direct Matarials $942 $1240 $2182 Direct Labor $730 $1010 $1740 Manufacturing Overhead $1813 $1197 $3010 Total Cost $3485 $3447 $6932

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