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	$	11,000		$	15,600		$	26,600
Estimated variable manufacturing overhead per machine-hour	$	1.80		$	2.60

	Job P			Job Q
Direct materials	$	17,000		$	10,000
Direct labor cost	$	24,200		$	9,100
Actual machine-hours used:
Molding		2,100			1,200
Fabrication		1,000			1,300
Total		3,100			2,500

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.

1. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

2. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

3. 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.)

Answer 1

Solution 1:

Estimated total manufacturing overhead = Variable overhead + Fixed overhad

= (2500*$1.80) + (1500*$2.60) + $26,600

= $25,000

Predetermined overhead rate = Estimated overhead / Estimated machine hours = $35,000 / 4000 = $8.75 per machine hour

Computation of overhead applied from Molding department
Particulars	Job P	Job Q
Actual machine hours	2100	1200
Overhead rate	$8.75	$8.75
Overhead applied to jobs	$18,375.00	$10,500.00

Solution 2:

Computation of overhead applied from Fabrication department
Particulars	Job P	Job Q
Actual machine hours	1000	1300
Overhead rate	$8.75	$8.75
Overhead applied to jobs	$8,750.00	$11,375.00

Solution 3:

Compuatation of unit product cost of Job Q
Particulars	Job Q
Direct Material	$10,000
Direct Labor	$9,100
Manufacturing overhead Q - 2500*$8.75	$21,875
Total Manufacturing cost	$40,975
Nos of units	$30
Unit product cost	$1,366