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:

Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job:

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 26 units, what would be the unit product cost?

Department Molding Painting Direct labor-hours 37,500 53,200 Machine-hours 89,000 36,000 Fixed manufacturing overhead cost $ 186,900 $ 468,160 Variable manufacturing overhead per machine-hour $ 2.60 - Variable manufacturing overhead per direct labor-hour - $ 4.60

Explanation / Answer

1) Predetermine overhead rate :

Molding department :186900/89000+2.60 = 4.70 per machine hour

Painting department = 468160/53200+4.60 = 13.40 per labour hour

2) Compute overhead cost applied to job 205 = (370*4.7+126*13.40) = 3427.40

3) Total manufacturing cost for job 205 = 934+1220+700+1010+3427.40 = 7291.40

4) Unit product cost = 7291.40/26 = 280.44 per unit

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.