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 $10,000 $15,000 $25,000 $ 1.40 $ 2.20 Job P $13,000 $21,000 Job O $8,000 $7,500 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 1,700 600 12,300 800 900 1,700 Sweeten Company had no underapplied or overapplied manufacturing overhead costs du ing 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 h 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.) Job P Job Total price for the job Selling price per unit

Answer 1

Solution 7:

Predetermined overhead rate = Estimated total overhead / Estimated machine hours = (2500*$1.40 + 1500*$2.20 + $25,000) / 4000

= $7.95 per machine hour

Computation of manufacturing cost assigned to Job P and Q
Particulars	Job P	Job Q
Direct Material	$13,000	$8,000
Direct Labor	$21,000	$7,500
Manufacturing overhead	$18,285	$13,515
Total Manufacturing cost	$52,285	$29,015

Computation of Total price and per unit price of job
Particulars	Job P	Job Q
Manufacturing Cost	$52,285.00	$29,015.00
Markup (80%)	$41,828.00	$23,212.00
Total price of job	$94,113.00	$52,227.00
Nos of units	20	30
Selling price per unit	$4,706	$1,741