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 $ 14,750 $ 17,850 $ 32,600 Estimated variable manufacturing overhead per machine-hour $ 3.30 $ 4.10 Job P Job Q Direct materials $ 32,000 $ 17,500 Direct labor cost $ 36,200 $ 15,100 Actual machine-hours used: Molding 3,600 2,700 Fabrication 2,500 2,800 Total 6,100 5,500 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.

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

Solution 12 and 13:

Computation of departmental overhead rates
Particulars	Molding	Fabrication
Fixed manufacturing overhead	$14,750	$17,850
Variable manufacturing overhead	$8,250	$6,150
Total manufacturing overhead	$23,000	$24,000
Nos of machine hours	$2,500	$1,500
Overhead rate per machine hour	$9.20	$16.00

Computation of overhead applied from molding department
Particulars	Job P	Job Q
Actual machine hours	3600	2700
Overhead rate	$9.20	$9.20
Overhead applied to jobs	$33,120.00	$24,840.00

Computation of overhead applied from fabrication department
Particulars	Job P	Job Q
Actual machine hours	2500	2800
Overhead rate	$16.00	$16.00
Overhead applied to jobs	$40,000.00	$44,800.00

Computation of manufacturing cost assigned to Job and unit product cost
Particulars	Job P	Job Q
Direct Material	$32,000.00	$17,500.00
Direct Labor	$36,200.00	$15,100.00
Manufacturing overhead - Molding	$33,120.00	$24,840.00
Manufacturing overhead - Fabrication	$40,000.00	$44,800.00
Total Manufacturing cost	$141,320.00	$102,240.00
Nos of units	20	30
Cost per unit	$7,066.00	$3,408.00

Solution 14:

Computation of Total price and per unit price of job
Particulars	Job P	Job Q
Manufacturing Cost	$141,320.00	$102,240.00
Markup (80%)	$113,056.00	$81,792.00
Total price of job	$254,376.00	$184,032.00
Nos of units	20	30
Selling price per unit	$12,718.80	$6,134.40

Solution 15:

Sweeten company cost of goods sold = $141,320 + $102,240 = $243,560