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
Direct labor-hours		38,000			53,000
Machine-hours		84,000			33,000
Fixed manufacturing overhead cost	$	260,400		$	482,300
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		84			129
Machine-hours		390			73
Direct materials	$	934		$	1,220
Direct labor cost	$	750		$	1,000

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 32 units, what would be the unit product cost?

• Req 1
• Req 2
• Req 3A
• Req 3B

Compute the Predetermined Overhead Rates used in the Molding Department and the Painting Department. (Round your answers to 2 decimal places.)

Predetermined Overhead Rate
Molding Department		per MH
Painting Department		per DLH

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

	Total overhead cost

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

3 A

	Department
	Molding	Painting	Total
Direct materials
Direct labor
Manufacturing overhead
Total cost

If the job contained 32 units, what would be the unit product cost? (Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations to the nearest dollar amount. Round your final answer to 2 decimal places.)

3B

Unit product cost

per unit

Answer 1

1.

Predetermined overhead rate = Estimated manufacturing overhead / Estimated activity

Moulding Department = $260,400+(84,000*2.40) / 84,000

Moulding Department = $260,400+201,600 / 84,000 = $5.5 per MH

Painting Department = $482,300+(53,000*$4.40) / 53,000

Painting Department = $482,300+233,200 / 53,000 = $13.5 per DLH

2.

Total overhead cost applied to Job 205:

Moulding Department = 390 * $5.5 = $2,145

Painting Department = 129 * $13.5 = $1,742 (rounded of)

Total overhead cost applied = $3,887

3.

Total manufacturing cost for Job 205:

	Moulding Department	Painting Department	Total
Direct materials	$934	$1,220	$2,154
Direct labor	750	1,000	1,750
Manufacturing overhead applied	2,145	1,742	3,887
Total manufacturing costs	$3,829	$3,962	$7,791

Unit product cost = $7,791 / 32 = $243.47 per unit

answered by: anonymous