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): Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine- hour Molding Fabrication Total 2,500 1,500 4,000 $10,750 $ 15,450 $26,200 $ 1.79 $ 2.50 Job P $16,000 $23,400 Job Q $9,500 $8,700 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,000 900 2,900 1,100 1,200 2,300 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. 1. What was the company's plantwide predetermined overhead rate? (Round your answer to 2 decimal places.) Predetermined overhead rate per MH

Answer 1

1. Predetermined overhead rate = $8.55 per MH -->refer working note below

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Working note - Calculation of predetermined overhead rate
	Molding	Fabrication	Total
Estimated total machine-hours used                                                      (a)	2500	1500
Estimated variable manufacturing overhead per machine-hour             (b)	$1.70	$2.50
Estimated variable manufacturing overhead cost                                  (c = a x b)	$4,250	$3,750	$8,000 [$4,250 + $3,750]
Estimated total fixed manufacturing overhead                                  (d)			$26,200
Estimated total manufacturing overhead                                           (e = c + d)			$34,200
Estimated total machine hours                                                                (f)			4000
Predetermined overhead rate                                                                  (e / f)			$8.55