Question

Required information [The following information applies to the questions displayed below.) Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments-Molding and Fabrication. It started, completed, and sold only two jobs during March -Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March): Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour teada per machine-hour Molding Fabrication Total 2,500 1,500 4,000 $12,000 $16,200 $28,200 $ 2.20 $ 3.00 Job P $21,000 $27,400 Job Q $12,000 $10,700 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,500 1,400 3,900 1,600 1,700 3,300 Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month. Required: For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.

12. If Job P included 20 units, what was its unit product cost?

13. If Job Q included 30 units, what was its unit product cost?

14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q?

15. What was Sweeten Company’s cost of goods sold for March? (Job P & Q)

Answer 1

12&13) Direct materials Direct labor cost Manufacturing overhead cost - Molding Manufacturing overhead cost - Fabrication Total manufacturing costs assigned Number of units produced Unit product cost 12) Job P $21,000 $27,400 $17,500 $19,320 $85,220 20 $4,261 13) Job Q $12,000 $10,700 $11,200 [2500 x $7.00; 1600 x $7.00] $23,460 [1400 x $13.80; 1700 x $13.80] $33,900 --> (a) 30 --> (b) $1,130 --> (a)/(b) Workings: Fixed manufacturing overhead costs Total Machine-hours Fixed overhead rate per MH Add: Variable overhead rate per MH Departmental overhead rate per MH Molding Fabrication $12,000 $16,200 2,500 1,500 $4.80 $10.80 ($12000 / 2500 MHs = $4.80; $16200 / 1500 MHs = $10.80] $2.20 $3.00 $7.00 $13.80 ($4.80 + $ 2.20 = $7.00; $10.80 + $3.00 = $13.80]

14 Unit product cost Markup price % Selling price per unit Job P $4,261 80% $7,669.80 Job Q $1,130 [As computed in Required-12 & 13] 80% $2,034.00 [$4261 x (1+80%) = $7669.80; $1130 X (1+80%) = $2034.00] 15) Cost of goods sold - Job P Cost of goods sold - Job Q Cost of goods sold for March $85,220 [As computed in Required-12 & 13] $33,900 [As computed in Required-12 & 13] $119,120 (Because there is no beginning or ending WIP]