High Desert Potteryworks makes a varlety of pottery products that it sells to retallers. 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- nours. At the beginning of the year, the company provided the following estimates: Department Molding Painting Direct labor-hours 33,000 82,000 $229,600 $494,700 51, e0e 35,e00 Machine-hours Fixed manufacturing overhead cost variable manufacturing overhead per machine-hour variable manufacturing overhead per direct labor-hour 2.40 4.40 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following Information concerning che job: Department Molding Painting Direct labor-hours 78 126 Machine-hours 370 73 $ 950 $ 700 Direct materials $1,300 $1,010 Direct labor cost 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 31 units, what would be the unit product cost?
High Desert Potteryworks makes a varlety of pottery products that it sells to retallers. 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- nours. At the beginning of the year, the company provided the following estimates: Department Molding Painting Direct labor-hours 33,000 82,000 $229,600 $494,700 51, e0e 35,e00 Machine-hours Fixed manufacturing overhead cost variable manufacturing overhead per machine-hour variable manufacturing overhead per direct labor-hour 2.40 4.40 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following Information concerning che job: Department Molding Painting Direct labor-hours 78 126 Machine-hours 370 73 $ 950 $ 700 Direct materials $1,300 $1,010 Direct labor cost 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 31 units, what would be the unit product cost?
Chapter1: Financial Statements And Business Decisions
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Concept explainers
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 varlety of pottery products that It sells to retalers. The company uses a Job-order costing system Iin
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 Palnting Department Is based on direct labor-
hours. At the beglnning of the year, the company provided the following estimates:
Department
Molding Painting
33,000
82,000
$229,600 $494,700
Direct labor-hours
51,000
35,000
Machine-hours
Fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
variable manufacturing overhead per direct labor-hour
2.40
24
4.40
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
78
126
Machine-hours
370
73
Direct materials
$ 950
$ 700
$1,300
$1,810
Direct labor cost
Requlred:
1. Compute the predetermined overhead rates used Iin the Molding Department and the Palnting 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 contalned 31 units, what would be the unit product cost?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3A Required 38
What would be the total manufacturing cost recorded for Job 205? (Round "Predetermined overhead rate" to 2 decimal places.
Round other intermediate calculations and final answers to the nearest dollar amount.)
Department
Molding
Painting
Total
Direct materials
Direct labor
Manufacturing overhead
Total cost
< Required 2
Required 3B >
Transcribed Image Text:High Desert Potteryworks makes a varlety of pottery products that It sells to retalers. The company uses a Job-order costing system Iin
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 Palnting Department Is based on direct labor-
hours. At the beglnning of the year, the company provided the following estimates:
Department
Molding Painting
33,000
82,000
$229,600 $494,700
Direct labor-hours
51,000
35,000
Machine-hours
Fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
2.40
24
4.40
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
78
126
Machine-hours
370
73
Direct materials
$ 950
$ 700
$1,300
$1,010
Direct labor cost
Requlred:
1. Compute the predetermined overhead rates used in the Molding Department and the Palnting 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 contalned 31 units, what would be the unit product cost?
Complete this question by entering your answers in the tabs below.
Required 1
Required 2 Required 3A Required 3B
If the job contained 31 units, what would be the unit product cost? (Round "Predetermined overhead rate" to 2 decimal
places. Round other intermediate calculations to the nearest dollar amount. Round your final answer to 2 decimal places.)
Unit product cost
per unit
< Required 3A
Required 3B >
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