High Desert Pottery works makes a variety of ceramic products that it sells to retailers such as

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Question:

High Desert Pottery works makes a variety of ceramic products that it sells to retailers such as Home Depot. The company uses a job costing system in which predetermined overhead rates are used to apply manufacturing overhead to jobs. The default 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's management made the following estimates:

	Department

	Frame	Chart
Direct labor hours	38,500	53,800
machine hours	89,000	31,000
Direct Material Cost	$189,000	$199,000
Direct labor cost	$280,000	$ 511,000
Fixed Cost of Manufacturing Overhead	$249,200	$ 511,100
Variable manufacturing overhead per machine-hour	$2.80	-
Variable manufacturing overhead costs per direct labor hour	-	$4.80

Job 205 started on August 1 and was completed on August 10. Company cost records show the following information about the job:

Department

Frame

Chart

Direct labor hours

126

machine hours

360

Materials put into production.

$930

$1,180

Direct labor cost

$710

$950

Required:

Calculate the default overhead rate used during the year in the molding department. Calculate the rate used in the Painting Department.

2

3-a.

Calculate the total cost of overhead applied to job 205.

What would be the total recorded cost for job 205?

3-b.

If the job contained 36 units, what would be the unit cost of the product?

4.	At the end of the year, High Desert Pottery works' records disclosed the following actual cost and operating data for all work performed during the year:

	Department

	Frame	Chart
Direct labor hours	32,000	55,000
machine hours	88,500	23,700
Direct Material Cost	$165,200	$417,000
Direct labor cost	$108,000	$436,000
overall manufacturing cost	$505,400	$750,900