PROBLEM 5-23 Multiple Departments; Applying Overhead

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.

Molding Painting
Direct labor-hours 30 85
Machine-hours 110 20
Materials placed into production $470 332
Direct labor cost $290 680


1. Compute' the predetermined overhead rate used during the year in the Molding Department. Compute
the rate used in the Painting Department.
2. Compute the total overhead cost applied to Job 205.
3. What would be the total cost recorded for Job 205? If the job contained 50 units, what would be the
unit product cost?
4. At the end of the year, the records of High Desert Potteryworks revealed the following actual cost and operating data for all jobs worked on during the year:

Molding Painting
Direct labor-hours .10,000 62,000
Machine-hours . 65,000 9,000
Direct materials cost .430,000 680,000
Direct labor cost . 108,000 436,000
Manufacturing overhead cost .570,000 750,000

What was the amount of underapplied or overapplied overhead in each department at the end of the year?