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	$	12,000		$	16,200		$	28,200
Estimated variable manufacturing overhead per machine-hour	$	2.20		$	3.00

	Job P			Job Q
Direct materials	$	21,000		$	12,000
Direct labor cost	$	27,400		$	10,700
Actual machine-hours used:
Molding		2,500			1,600
Fabrication		1,400			1,700
Total		3,900			3,300

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.

11. 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.)

12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)

12a 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.)

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? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

Answer 1

Departmental rate :

Molding = 12000/2500+2.2 = 7 per hour

Fabrication = 16200/1500+3 = 13.80 per hour

11) Manufacturing overhead applied to Fabrication Department

	Job P	Job Q
Manufacturing overhead applied	1400*13.80 = 19320	23460

12) Job P Unit product cost

	Job P
Direct material	21000
Direct labor	27400
Molding overhead (2500*7)	17500
Fabrication overhead	19320
Total	85220
Unit	20
Unit product cost	4261

13) Job Q Unit product cost

	Job Q
Direct material	12000
Direct labor	10700
Molding overhead (1600*7)	11200
Fabrication overhead	23460
Total	57360
Unit	30
Unit product cost	1912

14) Selling price Job P = 85220*1.8 = 153396

Selling price Job Q = 57360*1.8 = 103248

15) Cost of goods sold = 85220+57360 = 142580