Question

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	$	11,000		$	15,600		$	26,600
Estimated variable manufacturing overhead per machine-hour	$	1.80		$	2.60

	Job P			Job Q
Direct materials	$	17,000		$	10,000
Direct labor cost	$	24,200		$	9,100
Actual machine-hours used:
Molding		2,100			1,200
Fabrication		1,000			1,300
Total		3,100			2,500

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.

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.)

Answer 1

1
Estimated variable manufacturing overhead	8400	=(2500*1.8)+(1500*2.6)
Estimated total fixed manufacturing overhead	26600
Estimated total manufacturing overhead	35000
Divide by Estimated total machine-hours used	4000
Plantwide predetermined overhead rate	8.75	per MH
2
	Job P	Job Q
Actual machine-hours used	3100	2500
X Plantwide predetermined overhead rate	8.75	8.75
Manufacturing overhead applied	27125	21875
3
	Job P
Direct materials	17000
Direct labor cost	24200
Manufacturing overhead applied	27125
Total manufacturing cost Job P	68325
4
Total manufacturing cost Job P	68325
Divide by units	20
Unit product cost Job P	3416
5
	Job Q
Direct materials	10000
Direct labor cost	9100
Manufacturing overhead applied	21875
Total manufacturing cost Job Q	40975
6
Total manufacturing cost Job Q	40975
Divide by units	30
Unit product cost Job Q	1366
7
	Job P	Job Q
Total manufacturing cost	68325	40975
Add: Markup @ 80%	54660	32780
Total price for the job	122985	73755
Divide by units	20	30
Selling price per unit	6149	2459
8
Cost of goods sold for March	109300	=68325+40975