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):

	Molding			Fabrication			Total
Estimated total machine-hours used		2,500			1,500			4,000
Estimated total fixed manufacturing overhead	$	13,750		$	17,250		$	31,000
Estimated variable manufacturing overhead per machine-hour	$	2.90		$	3.70

	Job P			Job Q
Direct materials	$	28,000		$	15,500
Direct labor cost	$	33,000		$	13,500
Actual machine-hours used:
Molding		3,200			2,300
Fabrication		2,100			2,400
Total		5,300			4,700

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.

5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)

5a. 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.)

5b. 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.)

5c. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

5d. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)

6a. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

6b. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

6c. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)

6d. 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.)

6e. 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.)

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

Answer 1

Answer to first 4 parts of the question: Estimated total fixed manufacturing overhead Estimated total machine-hours used Plantwide fixed mfg. overhead rate per MH Add: Variable mfg. overhead rate per MH Plantwide predetermined overhead rate per MH $31,000 ($13750 + $17250] 4,000 [2500 + 1500] $7.75 ($31000 / 4000 MHS = $7.75] $6.60 ($2.90 + $3.70] $14.35 Direct materials Direct labor cost Manufacturing overhead cost allocated 5) Total manufacturing costs assigned Number of units produced 5a) Unit product cost Job P $28,000 $33,000 $76,055 $137,055 20 $6,853 Job Q $15,500 $13,500 $67,445 [5300 MHs x $14.35; 4700 MHs x $14.35] $96,445 --> (a) 30 --> (b) $3,215 --> (a) / (b) Selling price per unit = Unit product cost x (1 + Desired markup %) Unit product cost Markup price % 5b) Selling price per unit Job P $6,853 80% $12,335 Job Q $3,215 [As computed in Requirement-(5a)] 80% $5,787 ($6853 x (1+80%) = $12335; $3215 x (1+80%) = $5787)

Cost of goods sold - Job P Cost of goods sold - Job Q 5c) Cost of goods sold for March $137,055 [As computed in Requirement-(5a)] $96,445 [As computed in Requirement-(5a)] $233,500 [Because there is no beginning or ending WIP] Plantwide fixed mfg. overhead rate per MH Add: Variable mfg. overhead rate per MH 5d) Predetermined overhead rates in each dept. Molding Fabrication $7.75 $7.75 [$31000 / 4000 MHS = $7.75] $2.90 $3.70 (Given] $10.65 $11.45