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	$	10,250		$	15,150		$	25,400
Estimated variable manufacturing overhead per machine-hour	$	1.50		$	2.30

	Job P			Job Q
Direct materials	$	14,000		$	8,500
Direct labor cost	$	21,800		$	7,900
Actual machine-hours used:
Molding		1,800			900
Fabrication		700			1,000
Total		2,500			1,900

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.

5. What was the total manufacturing cost assigned to Job Q?

6. If Job Q included 30 units, what was its unit product cost?

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?

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

Answer 1

Plant wide OH rate per MH:
Fixed Manufacturing OH (25400/4000 MH)				6.35
Variable Manaufacturing OH				3.8
Total Plantwide OH rate				10.15	Per MH
Req5.
Manufacturing Cost of Job Q:
Direct Material			8500
Direct Labour			7900
Overheads applied			19285
(1900 MH @ 10.15 per MH)
Total Manufacturing Cost			35685
Req 6.
Total Manufacturing cost of Job Q:				35685
Divide: Number of units				30
Cost per unit				1189.5
Req 7.
Total Manufacturing cost and Selling price per unit:
			Job P	Job Q
Direct material			14000	8500
Direct Labour			21800	7900
Overheads applied
Job P(2500 H @10.15)			25375
Job Q (1900 MH @10.15)				19285
Total Manufacturing Cost			61175	35685
Add: Markup @ 80% of cost			48940	28548
Selling price			110115	64233
Divide: Number of units			20	30
Selling price per unit			5505.75	2141.1
Req 8.
Cost of goods sold:
Cost of Job P			61175
Cost of Job Q:			35685
Total cost of goods sold			96860