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 1,500 $16,200 2,500 $12,000 Estimated total machine-hours used 4,000 $28,200 Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour 3.00 2.20 Job P Job Q $12,000 $10,700 Direct materials $21,000 $27,400 Direct labor cost Actual machine-hours used: Molding 2,500 1,400 1,600 Fabrication 1,700 Total 3,900 3,300 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

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

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

7. 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?

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

Answer 1

1.

Predetermined overhead rate

$ 9.55

per MH

Predetermined overhead rate = $ ( 28,200 + 2.20 * 2,500 + 3.00 x 1,500) / 4,000 MH = $ 9.55 per MH

5. Total manufacturing cost assigned to Job Q = $ 12,000 + $ 10,700 + 3,300 x $ 9.55 = $ 54,215

6. Unit product cost for Job Q = $ 54,215 / 30 units = $ 1,807

7.

	Product P	Product Q
Direct materials	$ 21,000	$ 12,000
Direct labor	27,400	10,700
Manufacturing overhead	37,245	31,515
Total Cost	$ 85,645	$ 54,215
Add: Markup of 80 %	68,516	43,372
Sales Price	$ 154,161	$ 97,587
Number of Units	20 units	30 units
Selling Price per Unit	$ 7,708	$ 3,253

8. Cost of Goods Sold = $ 85,645 + $ 54,215 = $ 139,860.