Question

I'd love to know how you solve all of these so I can duplicate it to get the answers to make sure I know how to do these. Thanks in advance for your help! I will be sure to give a thumbs up.

(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. It started only two jobs during March-Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. 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 fixed manufacturing overhead Estimated variable manufacturing overhead per direct labor-hour Estimated total direct labor-hours to be worked Total actual manufacturing overhead costs incurred 14,400 1.50 3,600 19,500 $ Direct materials Direct labor cost Actual direct labor-hours worked Job P Job Q $ 15,000 $ 9,600 $ 40,500 $ 12,000 2,700 800 1. value: 10.00 points Required: 1. What is the company's predetermined overhead rate? (Round your answer to 2 decimal places.) Predetermined overhead rate $ 5.50 per DLH

Answer 1

1) Predetermined overhead rate= Estimated total manufacturing overhead cost/Estimated total direct labor hours

= ($1.50*3600+14400)/3600= $5.50 per DLH

2) Manufacturing overhead applied to Job P= 2700*$5.50= $14850

Manufacturing overhead applied to Job Q= 800*$5.50= $4400

3) Direct labor hourly wage rate of Job P= $40500/2700= $15 per DLH

Direct labor hourly wage rate of Job Q= $12000/800= $15 per DLH

4-a)

Direct materials	$15000
Direct labor	40500
Manufacturing overhead applied	14850
Total manufacturing cost	$70350
/ Number of units	35
Unit product cost	$2010

b)

Direct materials	$9600
Direct labor	12000
Manufacturing overhead applied	4400
Total manufacturing cost	$26000

5)

Transaction	General Journal	Debit	Credit
1.	Raw materials (15000+9600+2600)	$27200
	Accounts payable		$27200
	(To record raw materials purchased on account)
2	Work in process (15000+9600)	$24600
	Raw materials		$24600
	(To record direct materials issued)

6)

Transaction	General Journal	Debit	Credit
1.	Work in process (40500+12000)	$52500
	Wages payable		$52500
	(To record direct labor costs added to production)

7)

Transaction	General Journal	Debit	Credit
1.	Work in process (14850+4400)	$19250
	Manufacturing overhead		$19250
	(To record manufacturing overhead applied)

8)

Schedule of Cost of Goods Manufactured
Direct materials:
Beginning raw materials inventory	$0
Add: Purchases of raw materials	27200
Total raw materials available	27200
Less: Ending raw materials inventory	-2600
Raw materials used in production		24600
Direct labor		52500
Manufacturing overhead applied		19250
Total manufacturing costs		96350
Add: Beginning work-in process inventory		0
Total cost of work-in process		96350
Less: Ending work-in process inventory		-26000
Cost of goods manufactured		$70350

9)

Transaction	General Journal	Debit	Credit
1.	Finished goods	$70350
	Work in process		$70350
	(To record transferred of work in process to finished goods)

10)

Work in Process
Beg. Bal.	$0
Materials	24600	70350	Finished goods
Labor	52500
Applied overhead	19250
End. Bal.	$26000

11)

Schedule of Cost of Goods Sold
Beginning finished goods inventory	$0
Add: Cost of goods sold	70350
Cost of goods available for sale	70350
Less: Ending finished goods inventory	0
Unadjusted cost of goods sold	$70350

12)

Transaction	General Journal	Debit	Credit
1.	Cost of goods sold	$70350
	Finished goods		$70350
	(To record transferred of finished goods to Cost of goods sold)

13) Under or overapplied overhead= Manufacturing overhead applied-Actual manufacturing cost

= $19250-19500= $250 underapplied

Underapplied overhead $250

14)

Transaction	General Journal	Debit	Credit
1.	Cost of goods sold	$250
	Manufacturing overhead		$250
	(To record underapplied overhead close to cost of goods sold)

15)

Income Statement for March
Sales (35*$2600)	$91000
Less: Cost of goods sold (70350+250)	-70600
Gross profit	20400
Less: Selling and administrative expenses	-13000
Net income	$7400