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.

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

Answer 1

• Requirement 15 asked

Job P	$                        114,620
Job Q	$                          80,640
Cost of Goods Sold	$                        195,260

• Working

Working		Molding Department:	Fabrication Department:
A	Total Fixed Overheads	$                          13,500	$                            17,100
B	Total machine hours	2,500	1,500
C = A/B	Fixed overhead rate	$                               5.40	$                              11.40
D	Variable Overhead rate	$                               2.80	$                                 3.60
E = C+D	Predetermined Departmental Overhead rates	$                               8.20	$                              15.00

	Job P	Job Q
Direct material cost	$                          27,000	$                            15,000
Direct Labor cost	$                          32,200	$                            13,100
Molding Department:
Manufacturing Overhead	$                          25,420	$                            18,040
Fabrication Department:
Manufacturing Overhead	$                          30,000	$                            34,500
Total manufacturing cost assigned	$                        114,620	$                            80,640