In: Accounting
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:
Department | |||||||
Molding | Painting | ||||||
Direct labor-hours | 36,000 | 51,700 | |||||
Machine-hours | 82,000 | 39,000 | |||||
Fixed manufacturing overhead cost | $ | 205,000 | $ | 454,960 | |||
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 | 130 | |||||
Machine-hours | 370 | 72 | |||||
Direct materials | $ | 944 | $ | 1,160 | |||
Direct labor cost | $ | 700 | $ | 950 | |||
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 37 units, what would be the unit product cost?