HIGH DESERT POTTERYWORKS High Desert Potteryworks makes a variety of pottery products that it sells...
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HIGH DESERT POTTERYWORKS High Desert Potteryworks makes a variety of pottery products that it sells to retailers such as Home Depot. The company uses a job-order costing system in which 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 cost. At the beginning of the year, the company's management made the following estimates: Molding Painting Direct labor-hours 12,000 60,000 Machine-hours 70,000 8,000 Direct materials cost $510,000 $650,000 Direct labor cost $130,000 $420,000 Manufacturing overhead cost $602,000 $735,000 The following information pertains to Job 205, which was started on August 1 and completed on August 10. Direct labor-hours Machine-hours Materials placed into production Direct labor cost Molding Painting 30 85 110 20 $470 $332 $290 $680 a. Compute the predetermined overhead rate used during the year in the Molding and Painting departments. b. Compute the total overhead cost applied to Job 205
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