Solution-Compute the predetermined overhead rates

Compute the predetermined overhead rates

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Reference no: EM133039966

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	32,000	58,000
Machine-hours	84,000	35,000
Fixed manufacturing overhead cost	$184,800	$522,000
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	Molding	Painting
Direct labor-hours	861	33
Machine-hours	310	66
Direct materials	$944	$1,180
Direct labor cost	$740	$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 33 units, what would be the unit product cost?

Reference no: EM133039966

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Compute the predetermined overhead rates

Reference no: EM133039966

Reference no: EM133039966

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