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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Molding 30,500 82,000 Painting 55,400 37,000 $ 164,000 $ 2.80 $ 493,060 0 0 $ 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: Molding Department Painting Direct labor-hours Machine-hours 78 350 130 70 Direct materials $ 930 $ 1,240 Direct labor cost $ 700 $ 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 25 units, what would be the unit product cost?
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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Molding 30,500 82,000 Painting 55,400 37,000 $ 164,000 $ 2.80 $ 493,060 0 0 $ 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: Molding Department Painting Direct labor-hours Machine-hours 78 350 130 70 Direct materials $ 930 $ 1,240 Direct labor cost $ 700 $ 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 25 units, what would be the unit product cost?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text: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:
Direct labor-hours
Machine-hours
Fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
Department
Molding
30,500
82,000
Painting
55,400
37,000
$ 164,000
$ 2.80
$ 493,060
0
0
$ 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:
Molding
Department
Painting
Direct labor-hours
Machine-hours
78
350
130
70
Direct materials
$ 930
$ 1,240
Direct labor cost
$ 700
$ 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 25 units, what would be the unit product cost?
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