Question

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		30,000			55,900
Machine-hours		84,000			35,000
Fixed manufacturing overhead cost	$	218,400		$	531,050
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		79			130
Machine-hours		320			67
Direct materials	$	942		$	1,180
Direct labor cost	$	750		$	960

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 22 units, what would be the unit product cost?

Complete this question by entering your answers in the tabs below.

• Req 1
• Req 2
• Req 3A
• Req 3B

Compute the Predetermined Overhead Rates used in the Molding Department and the Painting Department. (Round your answers to 2 decimal places.)

	Predetermined Overhead Rate Molding Department per MH Painting Department per DLH

• Complete this question by entering your answers in the tabs below.

• Req 1
• Req 2
• Req 3A
• Req 3B

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

  	Total overhead cost

Answer 1

1	Predetermined overhead rate
	Molding Department
	Fixed manufacturing overhead cost (218400/84,000)=					2.6
	Variable manufacturing overhead rate per machine hour					2.8
	Predetermined overhead rate					5.4	per MH's
	Painting Department
	Fixed manufacturing overhead cost (531050/55900)=					9.5
	Variable manufacturing overhead rate per machine hour					4.8
	Predetermined overhead rate					14.3	per DLH
2)	total overhead cost applied ot job 205
					Molding	painting	total
	Molding	(320*5.4)			1728		1728
	Painting	(130*14.30)				1859	1859
	total				1728	1859	3587
	total overhead cost applied to job 205				3587
3-a)	total manufacturing cost
					Molding	painting	total
	Direct materials				942	1180	2122
	Direct labor cost				750	960	1710
	overhead cost applied				1728	1859	3587
	total				3420	3999	7419
	total manufacturing cost			$7,419
3-b)	unit product cost =		7419/22
			337.23