High Desert Potteryworks makes a variety of pottery products that it sells to re

Question

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: Department Molding Painting 36,000 51,900 83,000 35,000 $215,800 $482,670 Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour$ Variable manufacturing overhead per direct labor-hour 2.40 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:

Explanation / Answer

Req 1. MOLDING DEPTT: Fixed OH Oh rate: Etsimated fixed Oh cost / Mahcine hours $ 215800 /83000 = 2.60 per Mh Molding deptt oh rate: variable oH rate per MH 2.4 Fixed OH rate per Mh 2.6 Total OH rate per MH 5 PAINTING DEPTT> Fixed OH rate : Estimated Fixed Oh cost/ Direct labouur hours $ 482670/51900 DLH = 9.30 per DLH Painting deptt OH rate; Variable rate per DLH 4.4 Fixed rate per DLH 9.3 Total OH rate per DLH 13.7 Req 2: OH cost applieed to Job 205 Molding deptt (350 MH @ 5) 1750 Painting (132 DLH @ 13.70) 1808.4 Total OH 3558.4 Req 3: Total manufacturing Cost Molding Painting Total Material 936 1140 2076 labour 700 970 1670 OH 1750 1808.4 3558.4 Total manufacturing Cost 3386 3918.4 7304.4 Rreq 4: Unit product cost: Total manufacturing cost 7304.4 Number of units 36 Unit product cost: 202.9

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