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):

	Molding			Fabrication			Total
Estimated total machine-hours used		2,500			1,500			4,000
Estimated total fixed manufacturing overhead	$	11,250		$	15,750		$	27,000
Estimated variable manufacturing overhead per machine-hour	$	1.90		$	2.70

	Job P			Job Q
Direct materials	$	18,000		$	10,500
Direct labor cost	$	25,000		$	9,500
Actual machine-hours used:
Molding		2,200			1,300
Fabrication		1,100			1,400
Total		3,300			2,700

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

Required:

For questions 1-9, assume that Sweeten Company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments and Job P included 20 units and Job Q included 30 units. For questions 10-15, assume that the company uses a plantwide predetermined overhead rate with machine-hours as the allocation base.

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

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

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	$	11,250		$	15,750		$	27,000
Estimated variable manufacturing overhead per machine-hour	$	1.90		$	2.70

	Job P			Job Q
Direct materials	$	18,000		$	10,500
Direct labor cost	$	25,000		$	9,500
Actual machine-hours used:
Molding		2,200			1,300
Fabrication		1,100			1,400
Total		3,300			2,700

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

11. How much manufacturing overhead was applied 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. Round your final answer to nearest whole dollar.)

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.)

Answer 1

Molding overhead rate = 11250/2500+1.9 = 6.4 per MH

Fabrication overhead rate = 15750/1500+2.7 = 13.20 per MH

8) Selling price and unit price

	Job P	Job Q
Direct material	18000	10500
Direct labor	25000	9500
Molding overhead	2200*6.4 = 14080	8320
Fabrication overhead	1100*13.20 = 14520	18480
Total	71600	46800
Selling price	128880	46800*1.8 = 84240
Unit price	6444	84240/30 = 2808

9) Cost of goods sold = 71600+46800 = 118400

10) Plantwide overhead rate = (2500*1.9+1500*2.7+27000)/4000 = 8.95 per MH

11) Overhead applied

	Job P	Job Q
Overhead applied	3300*8.95 = 29535	24165

12) Unit product cost

	Job P
Direct material	18000
Direct labor	25000
Overhead	29535
Total	72535
Unit product cost	72535/20 = 3627

13) Unit product cost

	Job Q
Direct material	10500
Direct labor	9500
Overhead	2700*8.95 = 24165
Total	44165
Unit product cost	44165/30 = 1472