Question

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 $12,250 $16,350 $28,600 $ 2.30 Job P $22,000 $28,200 Job o $12,500 $11,100 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,600 1,500 4,100 1,700 1,800 3,500 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-hoursos 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

Departmental Predetermined Overhead rate Molding Dept Fabrication Dept $ 12,250 $ 16,350 $ 5,750 $ 4,650 $ 18,000 $ 21,000 Estimated Fixed manfacturing Overhead Estimated variable manfacturing Overhead Estimated Total manfacturing Overhead Add Working Estimated variable manfacturing Overhead 2500 x 2.30 = 5750 1500 x 3.10 = 4650 Divide Estimated Total manfacturing Overhead (a) Estimated Total machine hours (b) Pre determined Overhead rate (a)/(b) Molding Dept Fabrication Dept $ 18,000 $ 21,000 $ 2,500 $ 1,500 $ 7.20 $ 14.00 per MH Calculate estimated manufacturing overhead in each dept and than divide with estimated machine hours to calculate predetermined rate. Overhead applied from molding department Actual Machine hours worked (a) Multiply Molding Dept Overhead Rate (b) Manufacturing Overhead applied (a) (b) Job P 2,600 7.20 18,720 $ $ Multipy actual hours worked in molding dept with molding dept OH rate. Overhead applied from Fabrication department Actual Machine hours worked (a) Multiply Fabrication Dept Overhead Rate (b) Manufacturing Overhead applied (a) (b) $ $ $ Job P 1,500 14.00 21,000 Multipy actual hours worked in fabrication dept with molding dept OH rate. 12. Unit product cost of Job P If it included 20 units $ $ Add Add Add Direct Material Direct Labor Manufacturing Overhead of Molding Dept. Manufacturing Overhead of Fabrication Dept. Total manufacturing Cost $ $ 22,000 28,200 18,720 21,000 89,920 $ $ 89,920 Divide Total Manufacturing Cost Total Units Unit Cost (a) (b) (a)/(b) 20 $ 4,496 To calculate manufacturing cost add direct material, direct labour and manufacturing overhead (calculated above). Divide total manufacturing cost by no of units.