Question

ework Help Save & Exit Submit High Desert Potteryworks makes a variety of pottery products that it sells to retalers. The system in which departmental predetermined overhead rates are used to apply manufacturing overhead cost to jobs The company uses a job-order costing etermined 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 foll pr owing estimates: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 35,800 57,00e 89,00 33,008 $142,400 $478,8e0 s 3.20 5.28 Job 205 was started on August 1 and completed on August 10. The company's cost rebrds show the following information concerning the job: Department MoldingPainting Direct labor-hours Machine- hours 79 37e 13e 68 Prey 3 of 3 Score.answer

Answer 1

Solution 1:

Computation of Predetermined overhead rate
	Molding Department	Painting Department
Fixed Manuafcturing Overhead cost	$1,42,400	$4,78,800
/Machine Hours	89000
/Direct Labor Hours		57000
Fixed Manufacturing overhead Rate	$1.60	$8.40
Add: Variable Manufacturing Overhead rate	$3.20	$5.20
Predetermined overhead rate	$4.80	$13.60
	Per Machine Hour	Per Labor Hour

Solution 2:

Computation of Total Overhead cost Applied to Job 205
	Molding Department	Painting Department
Predetermined overhead rate	$4.80	$13.60
*Machine Hours	370
*Labor Hours		130
Manufacturing Overhead applied	$1,776	$1,768
Total Manufacturing Overhead Applied = $1776 + $1768 = $3,544

Solution 3-a:

Computation of Total Manufacturing cost for Job 205
	Amount
Direct material ($940+$1160)	$2,100
Direct Labor Cost ($730+ $1020)	$1,750
Manufacturing Overhead applied	$3,544
Total Manufacturing Cost for Job 205	$7,394

Solution 3-b:

Unit Product Cost = Total Manufacturing Cost / Units = $7394 / 27 = $273.8516 or $273.85 (rounded)