Question

Required information

[The following information applies to the questions displayed below.]

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	$	14,500		$	17,700		$	32,200
Estimated variable manufacturing overhead per machine-hour	$	3.20		$	4.00

	Job P			Job Q
Direct materials	$	31,000		$	17,000
Direct labor cost	$	35,400		$	14,700
Actual machine-hours used:
Molding		3,500			2,600
Fabrication		2,400			2,700
Total		5,900			5,300

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.

4. 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.)

5- What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

6- 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.)

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

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

Answer 1

4.The unit product cost is calculated by dividing total manufacturing costs by the number of units produced

Direct materials cost	$31,000
Direct labor cost	$35,400
Applied manufacturing overhead	0
Total manufacturing cost	66,400
Divided by: number of units	20
Unit cost	$3,320

Predetermined overhead rate with machine-hours as the allocation base. Divide the total estimated manufacturing overhead costs by an allocation base to get the predetermined overhead rate. The company's allocation base is machine hours worked.

Estimated fixed manufacturing overhead	32,200
Estimated variable manufacturing overhead	2,500x3.20 + 1500 x 4 = 14,000
Total estimated manufacturing overhead	46,000
Divided by: Machine hours worked	4000
POHR	11.5

5. Total manufacturing cost assigned to Job Q is computed as follows

Direct materials cost	17,000
Direct labor cost	14,700
Applied manufacturing overhead	0
Total manufacturing cost	31,700

6.The unit product cost is calculated by dividing total manufacturing costs by the number of units produced

Direct materials cost	17,000
Direct labor cost	14,700
Applied manufacturing overhead	0
Total manufacturing cost	31,700
Divided by: number of units	30
Unit cost	$1,056.66