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	$	10,500		$	15,300		$	25,800
Estimated variable manufacturing overhead per machine-hour	$	1.60		$	2.40

	Job P			Job Q
Direct materials	$	15,000		$	9,000
Direct labor cost	$	22,600		$	8,300
Actual machine-hours used:
Molding		1,900			1,000
Fabrication		800			1,100
Total		2,700			2,100

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

Required:

1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

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

3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)

4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

6. 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.)

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

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

For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base.

Answer 1

Required 1 :
	Molding	Fabrication	Total
Estimated total machine hours used	2500	1500	4000
(*) Estimated variable manufacturing overhead per machine hour	1.60	2.40
Estimated total variable manufacturing overhead	4000	3600	7600
Estimated total fixed manufacturing overhead	10500	15300	25800
Estimated total manufacturing overhead	14500	18900	33400

Plantwide predetermined overhead rate = Estimated total manufacturing overhead / Estimated total machine hours used = 33400 / 4000

8.35

per MH

Required 2 :
	Job P	Job Q
Total actual machine hours used	2700	2100
Plantwide predetermined overhead rate	8.35	8.35
Manufacturing overhead applied	22545	17535

Required 3 :
	Job P
Direct materials	15000
Direct labor cost	22600
Manufacturing overhead applied	22545
Total manufacturing cost	60145

Required 4 :
	Job P
Total manufacturing cost	60145
(/) No. of units	20
Unit product cost	3007

Required 5 :
	Job Q
Direct materials	9000
Direct labor cost	8300
Manufacturing overhead applied	17535
Total manufacturing cost	34835
Required 6 :
	Job Q
Total manufacturing cost	34835
(/) No. of units	30
Unit product cost	1161

Required 7 :
	Job P	Job Q
Total manufacturing cost	60145	34835
(+) Markup @ 80%	48116	27868
Selling price	108261	62703
(/) No. of units	20	30
Selling price per unit	5413	2090

Required 8 :
Cost of goods sold = Total manufacturing costs of Jobs sold = 60145 + 34835	94980