FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company's job-order costing system uses
departmental predetermined overhead rates 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:
Direct labor-hours
Machine-hours
Fixed manufacturing overhead cost
Variable manufacturing overhead per machine-hour
Variable manufacturing overhead per direct labor-hour
Direct labor-hours.
Machine-hours
Direct materials
Direct labor cost
Department
Molding
89
380
$938
$740
Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning
the job:
Painting
127
71
Department
$1,140
$ 970
Molding
34,500
88,000
$ 158,400
$ 3.00
0
Painting
57,900
37,000
$ 515,310
0
$5.00
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 40 units, what would be its unit product cost?
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Transcribed Image Text:High Desert Potteryworks makes a variety of pottery products that it sells to retailers. The company's job-order costing system uses departmental predetermined overhead rates 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: Direct labor-hours Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Direct labor-hours. Machine-hours Direct materials Direct labor cost Department Molding 89 380 $938 $740 Job 205 was started on August 1 and completed on August 10. The company's cost records show the following information concerning the job: Painting 127 71 Department $1,140 $ 970 Molding 34,500 88,000 $ 158,400 $ 3.00 0 Painting 57,900 37,000 $ 515,310 0 $5.00 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 40 units, what would be its unit product cost?
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