High Desert Potteryworks produces a variety of pottery items that it sells to retailers. The company uses
Question:
High Desert Potteryworks produces a variety of pottery items that it sells to retailers. The company uses a work order costing system in which department-predetermined overhead rates are used to apply production overhead costing to jobs. The predetermined overhead rate in the Molding Department is based on machine-hours and in the Paint Department direct labor-hours. The company made the following forecasts at the beginning of the year:
Department | |||
---|---|---|---|
molding | Table | ||
Direct working hours | 34,000 | 55,600 | |
machine-clock | 87,000 | 36,000 | |
Fixed overhead cost of production | 261,000 $ | 505,960 $ | |
Variable production load per machine-hour | $2.60 | 0 | |
Variable production load per direct labor-hour | 0 | $4.60 |
Work 205 began on August 1 and was completed on August 10. The company's cost records show the following business-related information:
Department | |||
---|---|---|---|
molding | Table | ||
Direct working hours | 74 | 127 | |
machine-clock | 380 | 68 | |
Direct materials | 940 dollars | $1,280 | |
direct labor cost | 730 dollars | 990 dollars |
Necessary:
1. Calculate the predetermined overhead rates used in the Molding Department and the Painting Department.
2. Calculate the total overhead applied to Job 205.
3 A. What would be the total production cost recorded for Job 205?
3-b. If the job contains 24 units, what would be the unit product cost?
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan