Question

Return 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): of 15 Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour Molding 2,500 $11,500 $ 2.00 Fabrication 1,500 $15,900 $ 2.80 Total 4,000 $27,400 Job P $19,000 $25,800 Job $11,000 $ 9,900 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,300 1,200 3,500 1,400 1,500 2,900 Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month. Required: For questions 1-9. assume that Sweeten Company uses departmental predetermined overhead rates with machine. hours as the allocation base in both departments and Job P included 20 units and Job Q included 30 units. For questions 10-15, assume that the company uses a plantwide predetermined overhead rate with machine-hours as the allocation base

Answer 1

(13)

Pre-Determind factory Overhead rate = (Estimated Total Fixed Overhaed / Estimated Total Machine Hours.)

= ( $ 27400 / 4000 Machine Hours) = $ 6.85/ MHR

Statement Showing The Unit Product Cost Of Job Q Per Unit

  Particulars Amount($)

Direct Materials   11000

Direct Labour    9900

Variable Overhead 7000

   Fixed Overhead   19685

  Total Cost (a)      47585

    Production Per Unit (b)   30 Units

  Cost Per Unit (a/b) = 1586.17

Working Note :

1) Total Variable Overhead=( Actual MHR Moulding Dept. X Variable Overhead Moulding Dept.)

+

(Actual MHR Fabrication Dept. X Variable Overhead Manufacturing Dept.)

=  (1400 X 2) + (1500 X 2.80) = $7000

2) Total Fixed Overhead = ( Actual MHR Moulding + Actual MtR Fabrication) X $ 6.85/ MHR

= (1400+1500) X 6.85 = $19865

14) Statement Showing The Selling Price Per Unit

     Particulars Job P($) Job Q($)

Total Cost    76735     47585

  Add: Mark up@ 80%   61388      38068

Total Sales Price 138123 85653

  No of Units 20 Units   30 units

Price Per Unit    $ 6906.15 $ 2855

Working Note :

Total Cost of Job P

Material = 19000

Direct Labour   = 25800

Variable Overhead = 7960

(2300x2) + (1200x2.80)

Fixed Overhead = 23975

Total Cost 76735

15) Cost Of Goods Sold for the Company

( Cost of Goods Sold for P + Cost of Goods Sold for Q) = (76735 + 47585) = $ 124320