Question

question 1

Required information The Foundational 15 (LO2-1, LO2-2, LO2-3, LO2-4) (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 Fabricatior 2,500 1,500 $13,750 $17,250 $ 2.90 $ 3.70 Job P $28,000 $33,000 Job $15,500 $13,500 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 3,200 2,100 5,300 2,300 2,400 4,700 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 2-1 1. What was the company's plantwide predetermined overhead rate? (Round your answer to 2 decimal places.) Predetermined overhead rate per MH

Answer 1

The requirement is to compute the plantwide overhead rate. That means both the molding and fabrication department data needs to be combined to compute plantwide overhead rate.

1.

Variable manufacturing overhead = Rate X machine hours

Molding = 2.9 * 2500 = $ 7,250

Fabrication = 3.7 * 1500 = $ 5,550

Variable manufacturing overhead = 7250 + 5550 = $ 12,800

Total manufacturing overhead = 13750 + 17250 + 12,800 = $ 43800

Hence, plantwide overhead rate = Total manufacturing overhead/machine hours

                                                                = 43800 / 4,000 = $ 10.95 per hour

2.

	Job P	Job Q
Machine hours (actual)	5300	4700
X    Overhead rate	10.95	10.95
Overheads applied	58,035	51,465

3.

	Job P
Direct materials	28,000
Direct labor cost	33,000
Overheads applied	58,035
total manufacturing cost	$ 119,035

4.

	Job P
total manufacturing cost	$ 119,035
Number of Units	20
Unit product cost	$ 5,951.75 per unit

5.

	Job Q
Direct materials	15,500
Direct labor cost	13,500
Overheads applied	51,465
total manufacturing cost	$ 80,465

6.

	Job Q
total manufacturing cost	$ 80,465
Number of Units	30
Unit product cost	$ 2682 per unit

7.

	Job P	Job Q
Total manufacturing cost	119,035	80,465
Add: markup at 80%	95,228	64,375
Sale value	214,263	144,837
Units	20	30
Selling price per unit	10713	4828

8.

Total cost of goods sold = total manufacturing cost of P and Q = 119,035 + 80,465 = $ 199,500