Chapter 2& 3 Saved Help Save & Exit Submit Check my work High Desert Potterywork

Question

Chapter 2& 3 Saved Help Save & Exit Submit Check my work 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 15 points rtment Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Molding Painting 56,500 82,000 36,000 $237,800 $519,800 37,500 Print References $ 2.60 -$4.60 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job: Departmen MoldingPainting Direct labor-hours Machine-hours Direct materials Direct labor cost 132 70 $ 932 1,120 $ 750 990 71 370 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 39 units, what would be the unit product cost?

Explanation / Answer

1)Predetermined overhead rate = variable overhead rate+ fixed overhead rate

Molding:2.6+   [237800/82000]

               2.6 + 2.9

                $ 5.5per MH

Painting : 4.6+ [519800/56500]

            4 .6+ 9.2

              $ 13.8 per DLH

2)Overhead applied to job 205 : [370*5.5 ] +[132*13.8]

                = 2035+ 1821.6

                 = $ 3856.60   [rounded to 3857 ]

3a)

3b)unit product cost = 7649 / 39 =$ 196.13 per unit

Molding Painting Total Directmaterial 932 1120 2052 Direct labor 750 990 1740 overhead 2035 1822 3857 Total 3717 3932 7649

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