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	$	14,500		$	17,700		$	32,200
Estimated variable manufacturing overhead per machine-hour	$	3.20		$	4.00

	Job P			Job Q
Direct materials	$	31,000		$	17,000
Direct labor cost	$	35,400		$	14,700
Actual machine-hours used:
Molding		3,500			2,600
Fabrication		2,400			2,700
Total		5,900			5,300

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.

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.)

Answer 1

Department overhead rate :

Molding = (14500/2500+3.2) = 9 per hour

Fabrication = (17700/1500+4) = 15.8 per hour

Calculate Selling price

	Job P	Job Q
Direct material	31000	17000
Direct labor	35400	14700
Overhead
Molding	3500*9 = 31500	2600*9 = 23400
Fabrication	2400*15.8 = 37920	2700*15.8 = 42660
Total manufacturing cost	135820	97760
Markup@80%	108656	78208
Selling price of Job	244476	175968
Unit	20	30
Selling price per unit	12224	5866