Question

required information

[The following information applies to the questions displayed below.]

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	$	14,250		$	17,550		$	31,800
Estimated variable manufacturing overhead per machine-hour	$	3.10		$	3.90

	Job P			Job Q
Direct materials	$	30,000		$	16,500
Direct labor cost	$	34,600		$	14,300
Actual machine-hours used:
Molding		3,400			2,500
Fabrication		2,300			2,600
Total		5,700			5,100

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.)

Answer 1

Calculate plantwide overhead rate :

Estimated total overhead = (2500+3.10+1500*3.90+31800) = $45400

Plantwide overhead rate = Estimated total overhead/Estimated machine hour

= 45400/4000

Plantwide overhead rate = $11.35 per machine hour