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	$	13,750		$	17,250		$	31,000
Estimated variable manufacturing overhead per machine-hour	$	2.90		$	3.70

	Job P			Job Q
Direct materials	$	28,000		$	15,500
Direct labor cost	$	33,000		$	13,500
Actual machine-hours used:
Molding		3,200			2,300
Fabrication		2,100			2,400
Total		5,300			4,700

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

Based on the information availablein the question, we can answer as follows:-

Step 1:- Calculate the predetermined overhead rate based on estimated machine hours

Predetermined overhead rate = Estimated total overheads/Estimated machine hours = (2,500 hours * $2.90) + (1,500 hours * $3.70) + $31,000/4,000 hours = $10.95 per hour

Step 2:- Calculate the Total manufacturing cost

Particulars	Job P	Job Q
Direct Materials	28,000	15,500
Direct Labor	33,000	13,500
Manufacturing overhead	58,035	51,465
Total Manufacturing cost	119,035	80,465

Manufacturing overhead :- Job P = $10.95 per hour * 5,300 hours = $58,035

Job Q = $10.95 per hour * 4,700 hours = $51,465

Step 3 :- Calculate the Cost of goods sold

Cost of Goods sold = $119,035 + $80,465

Cost of goods sold = $199,500

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