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)?
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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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