Question

Required information

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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	$	11,250		$	15,750		$	27,000
Estimated variable manufacturing overhead per machine-hour	$	1.90		$	2.70

	Job P			Job Q
Direct materials	$	18,000		$	10,500
Direct labor cost	$	25,000		$	9,500
Actual machine-hours used:
Molding		2,200			1,300
Fabrication		1,100			1,400
Total		3,300			2,700

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. 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.)

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

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)

Answer 1

1) Predetermine overhead rate = (2500*1.9+1500*2.7+27000)/4000 = 8.95 per hour

2) Overhead applied to Job P = 3300*8.95 = 29535

Overhead applied to Job Q = 2700*8.95 = 24165

3) Total manufacturing cost to Job P

Direct material	18000
Direct labor	25000
Overhead	29535
Total manufacturing cost	72535

4) Unit product cost = 72535/20 = 3627

5) Total manufacturing cost to Job Q

Direct material	10500
Direct labor	9500
Overhead	24165
Total manufacturing cost	44165

6) Unit product cost = 44165/30 = 1472

7) Selling price

	Job P	Job Q
Direct material	18000	10500
Direct labor	25000	9500
Overhead	29535	24165
Total manufacturing cost	72535	44165
Markup	58028	35332
Selling price	130563	79497
Selling price per unit	6528	2650

8) Cost of goods sold = 58028+35332 = 93360

9) Molding overhead rate = (11250/2500+1.9) = 6.40 per hour

Fabrication overhead rate = (15750/1500+2.7) = 13.20 per hour