Question

The Foundational 15 [LO2-1, LO2-2, LO2-3. L02-4) 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 wo manufacturing departments-Molding and Fabrication. It started, completed, and sold only two jobs during March- Bob P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all Bata 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, eee $ 1.40 $ 2.20 Job P $13, eee $21,800 Job $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. Neyt

Answer 1

Single overehadrate used one rate to allocate cost. it doesnot take into account departmental hours.

1-8: Plantwide overheadrate

= (variable cost+fixed cost )/machine hours

=[($1.40*2,500 + $2.20*1,500)+$25,000] /4,000 hours

=$3,500+$3,300+$25,000 / 4000

=$7.95 per machine hour

2] now we will allocate cost on the basis of machine hours

	P	Q
Machine hour	2,300	1,700
Cost allocated	$18,285[2,300*$7.95 per MH]	$13,515[1,700*$7.95 per MH]

3] Total manufacturing cost = labor+Material+Overehad allcoated

Direct material	$13,000
Direct labor	$21,000
Cost allocated	$18,285[2,300*$7.95 per MH]
Total manufacturing cost	$52,285

4] 20units = Total cost/ number of units

=$52,285/20

=$2,614

5]

Direct material	$8,000
Direct labor	$7,500
Cost allocated	$13,515
Total manufacturing cost	$29,015

6]

30 units = Total cost/ number of units

=$29,015/30

=$967

=$2,614

7]

	P	Q
Manufacturing cost	$52,285	$29,015
Add: Mark up 80%	$41,828[$52,285*80%]	$23,212[$29,015*80%]
Selling price	$94,113	$52,227
per unit	$4,706[94,113/20]	$1,741[52,227/30]

8]total cost of goods sold = $52,285+29,015

=$81,300

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