High Desert Potteryworks makes a variety of pottery products

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 30, 500 56,800 82,000 37,000 $196,800 $556,640 Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour$ 2.60 Variable manufacturing overhead per direct labor-hour $4.60 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 MoldingPainting Direct labor-hours Machine-hours Direct materials 125 67 $ 932 $1,260 970 75 350 Direct labor cost $ 740

Solution

Answer 1) Department Fixed Manufacturing Overhead Cost Machine Hour/Direct Labour our Predetermined Overhead Rate Molding Department               196,800.00           82,000.00                    2.40 Painting Department               556,640.00           56,800.00                    9.80 Answer 2) Molding Department Machine Hour/Direct Labour our Predetermined Overhead Rate Cost Fixed Manufacturing Overhead Cost                       350.00                     2.40                840.00 Variable Manufacturing Overhead Cost                       350.00                     2.60                910.00 Total Overhead Cost            1,750.00 Painting Department Fixed Manufacturing Overhead Cost                       125.00                     9.80            1,225.00 Variable Manufacturing Overhead Cost                       125.00                     4.60                575.00 Total Overhead Cost            1,800.00 Total Overhead Cost to Job 205            3,550.00 Answer 3- a) Department Direct Material Cost Direct Labor Cost Total Overhead Cost Total Molding Department                       932.00                 740.00            1,750.00 3,422.00 Painting Department                   1,260.00                 970.00            1,800.00 4,030.00 Total Manufacturing Cost for Job 205 7,452.00 Answer 3- b) Unit Product Cost = Total Manufacturing Cost / Total Number Of Units Unit Product Cost 7452/26 Unit Product Cost                       286.62