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 $ 14,250 $ 17,550 $ 31,800 Estimated variable manufacturing overhead per machine-hour $ 3.10 $ 3.90 Job P Job Q Direct materials $ 30,000 $ 16,500 Direct labor cost $ 34,600 $ 14,300 Actual machine-hours used: Molding 3,400 2,500 Fabrication 2,300 2,600 Total 5,700 5,100 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.

predetermined overhead rate

manufactured overhead applied: both jobs

total manufacturing cost

unit product cost

total manufacturing cost

unit product cost

total price for the job: both jobs

selling price per unit: both jobs

COGS

molding department predetermined overhead rate

fabrication department predetermine overhead rate

manufacturing overhead applied from molding department: both jobs

manufacturing overhead applied from fabrication department: both jobs

If Job P included 20 units, what was its unit product cost?

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

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?

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

Answer 1

	JOB P	JOB Q
Total price for the job	$234,720	$168,048
Selling price per unit	$11,736	$5,601.6
1. Calculation of predetermined fixed overhead rate per machine hour.
Details	Molding	Fabrication
Estimated machine hours	2,500	1,500
Estimated fixed manufacturing overhead	$14,250	$17,550
Predetermined fixed overhead rate per machine hour	$5.70	$11.70
2. Calculation of Cost of manufacture for JOB P and JOB Q
Details		JOB P			JOB Q
		Molding	Fabrication	Total	Molding	Fabrication	Total
Machine hours	(A)	3400	2300	5700	2500	2600	5100
Variable manufacturing overhead rate per machine hour	(B)	3.1	3.9		3.1	3.9
Fixed manufacturing overhead rate per machine hour	(C)	5.7	11.7		5.7	11.7
Direct material	(D)			30000			16500
Direct labor	(E )			34600			14300
Variable manufacturing overhead   (A X B)	(F)	10540	8970	19510	7750	10140	17890
Fixed manufacturing overhead      (A X C )	(G )	19380	26910	46290	14250	30420	44670
Total Manufacturing Cost          (D + E + F + G)	(H)			130400			93360
Mark -up   (80% on H)	(I)			104320			74688
Selling price      (H + I)	(J)			234720			168048
No. Of units produced	(K)			20			30
Selling price per unit    ( J / K)				11736			5601.6