Question

# Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories....

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. 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):

Answer the following questions:

1. What is the company’s predetermined overhead rate? (Round 2 decimal places)

2. How much manufacturing overhead was applied to Job P and Job Q

3. What is the direct labor hourly wage rate?

4. If Job P includes 20 units, what is its unit product cost?

5. What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)?

Estimated total fixed manufacturing overhead \$ 10,500
Estimated variable manufacturing overhead per direct labor-hour \$ 1.10
Estimated total direct labor-hours to be worked 2,100
Total actual manufacturing overhead costs incurred \$ 12,600
 Job P Job Q Direct Materials 13,100 8,100 Direct Labor Cost 14,400 6,600 Actual direct labor hours worked 1,200 550

Solution:

1.

 Predetermined Overhead rate Fixed Overhead 10500 Variable Overhead 2310 Estimated Total Manufacturing Overhead 12810 Estimated Direct Labor Hours 2100 Predetermined Overhead rate =12810/2100 \$6.1

2.

 Hours Worked Rate per hour Overhead Applied Job P 1200 6.1 7320 Job Q 550 6.1 3355

3.

 Job P Job Q Labor Cost 14400 6600 Actual Hours Worked 1200 550 Direct Labor hourly wage rate 12 12

4.

 Job P Direct Materials 13100 Direct Labor Cost 14400 Manufacturing Overeheads 7320 Total Cost 34820 Units Produced 20 Cost per unit =34820/20 \$1741

5.

 Job Q Direct Materials 8100 Direct Labor Cost 6600 Manufacturing Overehead 3355 Total Cost 18055

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