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 $13,250 $16,950 $30,200 Estimated variable manufacturing overhead per machine-hour $ 2.70 $ 3.50 Job P $26,000 $31,400 Job $14,500 $12,700 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 3,000 1,900 4,900 2,100 2,200 4,300 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. - What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.) Total manufacturing cost

Answer 1

Solution:

$72,565

Explanation:

Estimated total overhead = Estimated fixed cost + estimated total variable cost = 30200 + (2500 x 2.7)+(1500 x 3.5)

= 30200 + 6750 + 5250

= 42,200

Plantwide predetermined rate = Estimated total overhead / Estimated total machine hours = 42200 / 4000 = 10.55

Manufacturing overhead = Direct materials + direct labour + (predetermined overhead rate x machine hours)

= 14500 + 12700 + (10.55 x 4300)

= 14500 + 12700 + 45365

= 72,565