Question

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 $12,250 $16, 350 $28,600 $ 2.30 $ 3.10 Job P $22,000 $28,200 Job o $12,500 $11,100 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,600 1,500 4,100 1,700 1,800 3,500 1 Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month

Answer 1

Unit product cost of job p based on Predetermined overhead based on Plantwide is $4509

​​​​​​and if predetermined overhead rate is based on Department then product cost per unit is $4496

Working

Predetermined overhead rate based on Machine hours

= Total Eastimated Manufacturing overhead / Total Machine hours

= $[28600 + (2.30×2500+3.10×1500) ] /4000

=(28600+ 5750 +4650)/4000

=39000/4000

=9.75 per machine hours

Above Predetermined overhead rate is based on plant wise

Calculation of Total Cost of Job P

	Job P
Direct Material	$22000
Direct labour	$28200
Manufacturing overhead
Total machine hours (2600+1500)×9.75	39975
Total product cost	90175

Unit cost = Total cost / No of unit produce

=90175/20

=4508.75 or 4509 ( Round to whole number )

If departmentment wise manufacturing cost is consider

	Job P
Direct Material	$22000
Direct labour	$28200
Manufacturing overhead
Moulding variable 2.30×2600	5980
Fabrication variable 3.10 × 1500	4650
Fixed Cost allocation
Moulding 12250/2500 = 4.9 × 2600	12740
Fabricatiom 16350/1500 =10.9 ×1500	16350
Total product cost	89920

Unit of job P based on predetermined department cost =89920/20 =4496