Question

[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
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.

Foundational 2-12

12. 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

Overhead rates :
Molding	8.80	=3.1+(14250/2500)
Fabrication	15.60	=3.9+(17550/1500)
	Job P	Job Q
Direct materials	30000	16500
Direct labor cost	34600	14300
Manufacturing overhead applied:
Molding	29920	22000
Fabrication	35880	40560
Total manufacturing cost	130400	93360
12
Total manufacturing cost Job P	130400
Divide by units	20
Unit product cost Job P	6520
13
Total manufacturing cost Job Q	93360
Divide by units	30
Unit product cost Job Q	3112
14
	Job P	Job Q
Total manufacturing cost	130400	93360
Add: Markup @ 80%	104320	74688
Total price for the job	234720	168048
Divide by units	20	30
Selling price per unit	11736	5602
15
Cost of goods sold for March	223760	=130400+93360