Hartselle Enterprises manufactures a variety of hand-finished pottery. Each piece of pottery must go through two critical and relatively standardized processes: molding and firing. Crystal Hartselle, founder of the company, is also responsible for maintaining the company€™s accounting information system. She currently calculates overhead rates on a monthly basis.

Required
A. Calculate a plantwide predetermined overhead rate using direct labor hours as the cost driver.
B. Calculate a plantwide predetermined overhead rate using machine hours as the cost driver.
C. Using the plantwide rate calculated on the basis of direct labor hours, how much overhead would be applied to a job requiring 25 direct labor hours?
D. Using the plantwide rate calculated on the basis of machine hours, how much overhead would be applied to a job requiring 5 machine hours?
E. Crystal is considering the use of departmental overhead rates. Assume that the cost driver for the molding department is direct labor hours and that the cost driver for the firing department is machine hours. How much overhead would be applied to a job using 10 direct labor hours and 3 machine hours in the molding department and 4 direct labor hours and 2 machine hours in the firingdepartment?

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Monthly Costs and Quantities Direct material Direct labor 2,500 pounds ($ 0.75 per pound) 300 hours (Pay rate: $7.50 per hour plus benefits at 20 percent of hourly rate) $6,000 300 (200 in molding and 100 in firing) 200 (50 in molding and 150 in firing) Overhead per department (estimated) Direct labor hours (estimated) Machine hours (estimated) Actual Overhead Costs Factory rent Factory utilities Advertising Factory equipment depreciation ales commissions $3,000 3,700 2,500 3,000 2,500