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	$	13,500		$	17,100		$	30,600
Estimated variable manufacturing overhead per machine-hour	$	2.80		$	3.60

	Job P			Job Q
Direct materials	$	27,000		$	15,000
Direct labor cost	$	32,200		$	13,100
Actual machine-hours used:
Molding		3,100			2,200
Fabrication		2,000			2,300
Total		5,100			4,500

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.

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?

12. If Job P included 20 units, what was its unit product cost?

13. If Job Q included 30 units, what was its unit product cost?

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?

15. What was Sweeten Company’s cost of goods sold for March?

Answer 1

Departmental predetermined overhead rates :
Molding	8.20	=2.8+(13500/2500)
Fabrication	15.00	=3.6+(17100/1500)
11
Manufacturing overhead applied from Fabrication:
Job P	30000	=2000*15
Job Q	34500	=2300*15
12
	Job P
Direct materials	27000
Direct labor cost	32200
Manufacturing overhead applied	55420	=(3100*8.2)+(2000*15)
Total manufacturing cost Job P	114620
Divide by units	20
Unit product cost Job P	5731
13
Direct materials	15000
Direct labor cost	13100
Manufacturing overhead applied	52540	=(2200*8.2)+(2300*15)
Total manufacturing cost Job Q	80640
Divide by units	30
Unit product cost Job Q	2688
14
	Job P	Job Q
Total manufacturing cost	114620	80640
Add: Markup @ 80%	91696	64512
Total price for the job	206316	145152
Divide by units	20	30
Selling price per unit	10316	4838
15
Cost of goods sold for March	195260	=114620+80640