Question

Questions:

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 Molding Fabrication Total 2,500 1,500 4,000 $11,250 $ 15,750 $ 27,000 $ 1.90 $ 2.70 Job P $ 18,000 $ 25,000 Job Q $10,500 $ 9,500 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,200 1,100 3,300 1,300 1,400 2,700 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.

1. What was the company’s plantwide predetermined overhead rate?

2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q?

3. What was the total manufacturing cost assigned to Job P?

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

5. What was the total manufacturing cost assigned to Job Q?

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

7. 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?

8. What was Sweeten Company’s cost of goods sold for March?

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department?

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q?

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?

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?

Answer 1

Answer-1:

Variable manufacturing overhead: Molding (2,500 $1.90) Fabrication (1,500 × $2.70) Total variable overhead Total fixed manufacturing overhead Total overhead of plant Total machine hours Pre-determined overhead rate $ 4,750 4,050 8,800 27.000 35,800 4,000 8.95 $

Answer-2:

Total machine hours Overhead rate per MH Overhead applied Job P 3,300 8.95 29,535 JobQ 2,700 8.95 24,165 $ $ $ $

Answer-3:

Manufacturing cost of Job P Material costs $ Labour costs Overhead applied Total manufacturing costs $ 18,000 25,000 29,535 72,535

Answer-4:

$ Unit cost of Job P Total manufacturing costs Number of units Unit cost 72,535 20 3,627

Answer-5 & 6:

Manufacturing cost of Job Q Material costs $ Labour costs Overhead applied Total manufacturing costs $ 10,500 9,500 24,165 44,165 $ Unit cost of Job Q Total manufacturing costs Number of units Unit cost 44,165 30 1,472

Answer-7:

Calculation of selling price per unit: $ Total manufacturing costs Add: Markup @ 80% of cost Total sales price Number of units Selling price per unit Job P 72,535 $ 58,028 130,563 20 6,528 JobQ 44,165 35,332 79,497 30 2,650

Answer-8:

$ Calculation of cost of goods sold: Manufacturing costs of Job P Manufacturing costs of Job Q Total cost of goods sold 72,535 44,165 116,700 $

Answer-9:

Molding Total fixed overhead $ 11,250 Number of machine hours 2,500 Fixed overhead per MH 4.50 Variable overhead per MH 1.90 Total departmental overhead per MH $ 6.40 Fabrication $ 15,750 1,500 $ 10.50 $ 2.70 $ 13.20