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): 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 $11,250 $ 15,750 $ 27,000 $ 1.90 $ 2.70 Job P $ 18,000 $ 25,000 Job Q $10,500 $ 9,500 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,200 1,100 3,300 1,300 1,400 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.

9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department?

10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q?

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?

12. If Job P included 20 units, what was its unit product cost?

13. If Job Q included 30 units, what was its unit product cost?

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?

15. What was Sweeten Company’s cost of goods sold for March?

Answer 1

9. Predetermined overhead = Estimated total manufacturing overhead / Estimated machine hours

Molding department = $11,250+2,500*1.9 / 2,500 = $6.4 per machine hour

Fabrication department = $15,750+1,500*$2.7 / 1,500 = $13.2 per machine hour

10.

Molding department to Job P = 2,200*$6.4 = $14,080

Molding department to Job Q = 1,300*$6.4 = $8,320

11.

Fabrication department to Job P = 1,100*$13.2 = $14,520

Fabrication department to Job Q = 1,400*$13.2 = $18,480

12.

Job P unit product cost = Direct material+Direct labor+Manufacturing overhead applied / Units

Job P unit product cost = $18,000+25,000+14,080+14,520 / 20 = $3,580 per unit

13.

Job Q unit product cost = $10,500+9,500+8,320+18,480 / 30 = $1,560 per unit

14.

	Job P	Job Q
Total cost	$71,600	$46,800
Add: Markup@80%	57,280	37,440
Selling price	128,880	84,240
Units produced	20	30
Selling per unit	$6,444	$2,808

15.

Sweeten company cost of goods sold = $71,600+46,800 = $118,400