Question

Required information [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. It started only two jobs during March-Job P and Job Q. Job P was completed and sold by the end of March and Job Q was incomplete at the end of March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. 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 fixed manufacturing overhead Estimated variable manufacturing overhead per direct labor-hour Estimated total direct labor-hours to be worked Total actual manufacturing overhead costs incurred $ 12,eee $ 1.40 2,480 $ 15,000 Direct materials Direct labor cost Actual direct labor-hours worked Job P $ 15,000 $ 22,500 1,500 Job $ 8,400 $10,500 700 Required: 1. What is the company's predetermined overhead rate? (Round your answer to 2 decimal places.) Prodetermined overhead rate per DLH

Answer 1

1.
Predetermined Overhead rate = $1.40 + $12000 / 2400 = $6.40 per DLH

2.
Manufacturing Overhead applied
Job P = 1500 x $6.40 = $9600
Job Q = 700 x $6.40 = $4480

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