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):

	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

For questions 1-4 assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base.

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)

moa job p _______

moa job q _______

3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)

total manufacturing cost _________

4. If Job P included 20 units, what was its unit product cost? (

unit product cost ________

Answer 1

Answer

• [1]

Working		Molding	Fabrication	Total
A	Estimated machine hours	2,500	1,500	4,000
B	Variable overhead per machine hours	$                       1.40	$                           2.20
C = A x B	Total Variable Overhead	$               3,500.00	$                   3,300.00	$        6,800.00
D	Total Fixed Overhead	$             10,000.00	$                 15,000.00	$     25,000.00
E = C+D	Total Overheads			$     31,800.00
F = E/A	Plantwide Predtermined Overhead rate			$                7.95	Answer

• [2]

	Job P	Job Q
Manufacturing Overheads applied	$             18,285.00	$                 13,515.00
[Workings]	[2300 MHs x $ 7.95]	[1700 MHs x $ 7.95]

• [3]

	Job P
Direct Material	$             13,000.00
Direct Labor	$             21,000.00
Manufacturing Overheads applied	$             18,285.00
Total manufacturing Cost	$             52,285.00

• [4] Unit Product Cost = $ 52285 / 20 units
  = $ 2,614.25