Question

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 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 2,300 800 900 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.

Answer 1

Solution :

Total Manufacturing Cost

$ 52,285

Working :

Step 1 : Plantwide Predetermined OH Rate :

Plantwide Predetermined OH Rate             = Total Estimated OH / Total Machine Hours

Total Estimated OH                                  = Variable OH + Fixed OH

                                                               = [(2,500 * $ 1.40) + (1,500 * $ 2.20)] + $ 25.000

                                                               = [$ 3,500 + $ 3,300] + $ 25,000

= $ 31,800.

Plantwide Predetermined OH Rate               = $ 31,800 / 4,000

                                                                 = $ 7.95 per Machine Hour

Step 2 : Total Manufacturing Cost Assigned to Job P :

Direct Material	$ 13,000
Direct Labor	$ 21,000
Manufacturing OH [(1,700 MH + 600 MH) * $ 7.95]	$ 18,285
Total Manufacturing Cost Assigned	$ 52,285

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