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 Molding Fabrication Total 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $14,750 $17,850 $32,600 Estimated variable manufacturing overhead per machine-hour $ 3.30 $ 4.10 Job P $32,000 $36,200 Job o $17,500 $15,100 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 3,600 2,500 6, 100 2,700 2,800 5,500 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.

Answer 1

	Job P	Job Q
Manufacturing overhead applied        [Pre-determined overhead rate x Actual machine hours used]	$71,675 [$11.75 x 6,100 hours]	$64,625 [$11.75 x 5,500 hours]

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Working note - Calculation of predetermined overhead rate
	Molding	Fabrication	Total
Estimated total machine-hours used                                                      (a)	2,500	1,500
Estimated variable manufacturing overhead per machine-hour             (b)	$3.30	$4.10
Estimated variable manufacturing overhead cost                                  (c = a x b)	$8,250	$6,150	$14,400 [$8,250 + $6,150]
Estimated total fixed manufacturing overhead (d)		$32,600
Estimated total manufacturing overhead                                           (e = c + d)		$47,000
Estimated total machine hours                                                               (f)		4,000
Predetermined overhead rate                                                                  (e / f)		$11.75