Question

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):

	Molding			Fabrication			Total
Estimated total machine-hours used		2,500			1,500			4,000
Estimated total fixed manufacturing overhead	$	10,000		$	15,000		$	25,000
Estimated variable manufacturing overhead per machine-hour	$	1.40		$	2.20

	Job P			Job Q
Direct materials	$	13,000		$	8,000
Direct labor cost	$	21,000		$	7,500
Actual machine-hours used:
Molding		1,700			800
Fabrication		600			900
Total		2,300			1,700

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.

11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)

13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

14. 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? (Do not round intermediate calculations.)

15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)

Answer 1

Predetermined overhead rates:
Molding Department	5.40	=1.4+(10000/2500)
Fabrication Department	12.20	=2.2+(15000/1500)
	Job P	Job Q
Direct materials	13000	8000
Direct labor cost	21000	7500
Manufacturing overhead applied	16500	15300
Total manufacturing cost	50500	30800
11
Manufacturing overhead applied:
Job P	7320	=600*12.20
Job Q	10980	=900*12.20
12
Total manufacturing cost	50500
Divide by units	20
Unit product cost	2525
13
Total manufacturing cost	30800
Divide by units	30
Unit product cost	1027
14
	Job P	Job Q
Total manufacturing cost	50500	30800
Add: Markup @ 80%	40400	24640
Total price for the job	90900	55440
Divide by units	20	30
Selling price per unit	4545	1848
15
Cost of goods sold for March	81300	=50500+30800