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 (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 $11,000 $15,600 $26,600 $ 1.80 $ 2.60 Job P $17.000 $24,200 Job O $10,eee $9,108 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2.100 1, 1,200 1,300 2. See 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 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 ? (Do not round Intermediate calculations. Round your final answers to nearest whole dollar) Jobp Joba Total price for the job Selling price per units 6,1405 2.450

Answer 1

Calculation of plant wide overhead rate

Variable overhead = molding + fabrication

= (2500*$1.80) + (1500*$2.60)

= $4500 + $3900

= $8400

Fixed overhead = $26600

Total overhead = $26600 + $8400 = $35000

Overhead rate = $35000/4000 = $8.75

Total overhead of job = (molding hours + fabrication hours) * rate

Job P = (2100+1000)*$8.75 = $27125

Job Q = (1200+1300)*$8.75 = $21875

Calculation of price of job

Particulars	Job P	Job Q
Material	$17000	$10000
Labor	$24200	$9100
Overhead	$27125	$21875
Total	$68325	$40975
Markup (80%)	$54660	$32780
Price of job	$122985	$73755
Units	20 units	30 units
Selling price per units	$6149	$2459

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