Question

Required information

The Foundational 15 [LO2-1, LO2-2, LO2-3, LO2-4]

[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):

	Molding			Fabrication			Total
Estimated total machine-hours used		2,500			1,500			4,000
Estimated total fixed manufacturing overhead	$	10,750		$	15,450		$	26,200
Estimated variable manufacturing overhead per machine-hour	$	1.70		$	2.50

	Job P			Job Q
Direct materials	$	16,000		$	9,500
Direct labor cost	$	23,400		$	8,700
Actual machine-hours used:
Molding		2,000			1,100
Fabrication		900			1,200
Total		2,900			2,300

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.

Foundational 2-1

1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)

4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

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? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

8. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)

13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

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? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

Answer 1

1
Estimated variable manufacturing overhead	8000	=(2500*1.7)+(1500*2.5)
Estimated total fixed manufacturing overhead	26200
Estimated total manufacturing overhead	34200
Divide by Estimated total machine-hours used	4000
Plantwide predetermined overhead rate	8.55	per MH
2
	Job P	Job Q
Actual machine-hours used	2900	2300
X Plantwide predetermined overhead rate	8.55	8.55
Manufacturing overhead applied	24795	19665
3
	Job P
Direct materials	16000
Direct labor cost	23400
Manufacturing overhead applied	24795
Total manufacturing cost Job P	64195
4
Total manufacturing cost Job P	64195
Divide by units	20
Unit product cost Job P	3210
5
	Job Q
Direct materials	9500
Direct labor cost	8700
Manufacturing overhead applied	19665
Total manufacturing cost Job Q	37865
6
Total manufacturing cost Job Q	37865
Divide by units	30
Unit product cost Job Q	1262
7
	Job P	Job Q
Total manufacturing cost	64195	37865
Add: Markup @ 80%	51356	30292
Total price for the job	115551	68157
Divide by units	20	30
Selling price per unit	5778	2272
8
Cost of goods sold for March	102060	=64195+37865
9
Predetermined overhead rates :
Molding Department	6.00	=1.7+(10750/2500)
Fabrication Department	12.80	=2.5+(15450/1500)
10
Manufacturing overhead applied:
Job P	12000	=2000*6
Job Q	6600	=1100*6
11
Manufacturing overhead applied:
Job P	11520	=900*12.8
Job Q	15360	=1200*12.8
12
	Job P
Direct materials	16000
Direct labor cost	23400
Manufacturing overhead applied	23520	=12000+11520
Total manufacturing cost Job P	62920
Divide by units	20
Unit product cost Job P	3146
13
	Job Q
Direct materials	9500
Direct labor cost	8700
Manufacturing overhead applied	21960	=6600+15360
Total manufacturing cost Job Q	40160
Divide by units	30
Unit product cost Job Q	1339
14
	Job P	Job Q
Total manufacturing cost	62920	40160
Add: Markup @ 80%	50336	32128
Total price for the job	113256	72288
Divide by units	20	30
Selling price per unit	5663	2410
15
Cost of goods sold for March	103080	=62920+40160