Question

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. 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):

Estimated total fixed manufacturing overhead	$	11,500
Estimated variable manufacturing overhead per direct labor-hour	$	1.30
Estimated total direct labor-hours to be worked		2,300
Total actual manufacturing overhead costs incurred	$	14,000

	Job P		Job Q
Direct materials	$	14,500	$	8,300
Direct labor cost	$	19,600	$	9,100
Actual direct labor-hours worked		1,400		650

Required:

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

2.	How much manufacturing overhead was applied to Job P and Job Q? (Round your intermediate calculations to 2 decimal places.

3.	What is the direct labor hourly wage rate?

4-a.	If Job P includes 20 units, what is its unit product cost?

4-b.	What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)?

         

Answer 1

1.

Estimated total fixed manufacturing overhead	$        11,500
Estimated total direct labor-hours to be worked	2,300
Predetermined overhead rate	$            5.00

2.

	Job P	Job Q
Predetermined overhead rate	$            5.00	$          5.00
Actual direct labor-hours worked	1,400	650
Fixed Manufacturing overhead applied	$    7,000.00	$ 3,250.00
variable manufacturing overhead per direct labor-hour	$            1.30	$          1.30
Variable Manufacturing overhead applied	$    1,820.00	$     845.00

3.

	Job P	Job Q
Direct labor cost	$ 19,600.00	$ 9,100.00
Actual direct labor-hours worked	1,400	650
Labour Hr rate	$          14.00	$        14.00

4.

	Job P
Direct Material	$ 14,500.00
Direct labor cost	$ 19,600.00
Variable Manufacturing overhead applied	$    1,820.00
Fixed Manufacturing overhead applied	$    7,000.00
Total Cost	$ 42,920.00
Units	20.00
Unit Cost	$    2,146.00

4.b.

	Job Q
Direct Material	$    8,300.00
Direct labor cost	$    9,100.00
Variable Manufacturing overhead applied	$        845.00
Fixed Manufacturing overhead applied	$    3,250.00
Total Cost	$ 21,495.00