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: Painting 53,800 38,000 $ 478,820 $ 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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct labor-hours Machine-hours Direct materials. Direct labor cost Department Molding. 82 330 $ 940 $ 750 Painting. 125 73 $ 1,240 $ 990 Department Molding 35,500 90,000 $ 216,000 $ 2.80 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 23 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: Painting 53,800 38,000 $ 478,820 $ 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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct labor-hours Machine-hours Direct materials. Direct labor cost Department Molding. 82 330 $ 940 $ 750 Painting. 125 73 $ 1,240 $ 990 Department Molding 35,500 90,000 $ 216,000 $ 2.80 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 23 units, what would be the unit product cost?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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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:
Painting
53,800
38,000
$ 478,820
$ 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:
Direct labor-hours
Machine-hours
Fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
Direct labor-hours
Machine-hours
Direct materials
Direct labor cost
Department
Molding.
82
330
$ 940
$ 750
Painting.
125
73
$ 1,240
$ 990
Department
Molding
35,500
90,000
$ 216,000
$ 2.80
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 23 units, what would be the unit product cost?
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