High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company uses
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 39,500 50,000
Machine-hours 85,000 31,000
Fixed manufacturing overhead cost $161,500 $450,000
Variable manufacturing overhead per machine-hour $3.00 - Variable manufacturing overhead per direct labor-hour - $5.00
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 75 130 Machine-hours 310 75 Direct materials $932 $1,260 Direct labor cost $720 $980
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 30 units, what would be the unit product cost?
ISE Introduction To Managerial Accounting
ISBN: 9781260091755
8th Edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen