Problem 3-24 Multiple Departments; Applying Overhead [LO3-1, LO3-2, LO3-3, LO3-7]

High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which 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's management made the following estimates:

	Department
	Molding	Painting
Direct labor-hours	38,500	53,800
Machine-hours	89,000	31,000
Direct materials cost	$189,000	$199,000
Direct labor cost	$280,000	$511,000
Fixed manufacturing overhead cost	$249,200	$511,100
Variable manufacturing overhead per machine-hour	$2.80	-
Variable manufacturing overhead per direct labor-hour	-	$4.80

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

83

126

Machine-hours

360

68

Materials placed into production

$930

$1,180

Direct labor cost

$710

$950

Required:

1.

Compute the predetermined overhead rate used during the year in the Molding Department. Compute the rate used in the Painting Department. (Round your answers to 2 decimal places.)

Predetermined Overhead Rate

Molding Department	________ Per MH
Painting Department	_________ Per DLH

2.

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

Total Overhead Cost

___________

3-a.

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

	Department	Department
	Molding	Painting	Total
Direct Materials			$
Direct Labor			$
Manufacturing Overhead			$
Total Cost	$	$	$

3-b.

If the job contained 36 units, what would be the unit product cost? (Round "Predetermined overhead rate" and final answer to 2 decimal places and other intermediate calculations to the nearest dollar amount.)

Unit Product Cost

__________ Per Unit

4.	At the end of the year, the records of High Desert Potteryworks revealed the following actual cost and operating data for all jobs worked on during the year:

	Department
	Molding	Painting
Direct labor-hours	32,000	55,000
Machine-hours	88,500	23,700
Direct materials cost	$165,200	$417,000
Direct labor cost	$108,000	$436,000
Manufacturing overhead cost	$505,400	$750,900

What was the amount of underapplied or overapplied overhead in each department at the end of the year? (Round "Predetermined overhead rate" to 2 decimal places, other intermediate calculations and final answers to the nearest dollar amount. Select "None" for no effect (i.e., zero variance).)

Molding	___________	_______________
Painting	___________	______________