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 4,000 $10,750 $15,450 $26,200 2,500 1,500 $ 1.70 2.50 Job P Job Q Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total $16,000 $9,500 $23,400 $8,700 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

Answer 1

1) Plantwide Predetermined Rate = Total fixed Manufacturing overhead /Total Machine Hours
	Molding	Fabrication	Total
Variable manufacturing overhead - Molding ($1.70 x 2500AMH) ;($2.50 x 1500 AMH)	$4,250	$3,750	$8,000
Fixed Manufacturing over head	$10,750	$15,450	$26,200
Estimated manufacturing overhead costs in Molding and Fabrication	$15,000	$19,200	$34,200
Plantwide Predetermined Rate = $34,200/4000 MH	$8.55	per MH
2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q?	Job P	Job Q
Actual machine-hours worked (a)	2900	2300
Predetermined overhead rate per MH (b)	$8.55	$8.55
Manufacturing overhead applied (a) × (b)	$24,795	$19,665
Q3 , Q4, Q5 & Q6 are solved below.
	Job P	Job Q
Direct Material	$16,000	$9,500
Direct Labour	$23,400	$8,700
Total Manufacturing Overhead	$24,795	$19,665
Total Manufacturing Cost	$64,195	$37,865
Units	20	30
Product per unit cost = Total manufacturing cost/ Units	$3,210	$1,262