Question

[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 $ 12,000 $ 1.40 2,400 $ 15,000 Direct materials Direct labor cost Actual direct labor-hours worked Job P $ 15,000 $ 22,500 1,500 Job O $ 8,400 $19,500 700 5 What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)? Total manufacturing cost

Answer 1

5.

Estimated direct labor hours = 2,400

Estimated fixed manufacturing overhead = $12,000

Estimated Variable manufacturing overhead = $1.40 per machine hour

Predetermined overhead rate =Estimated Variable manufacturing overhead + Estimated total fixed manufacturing overhead/Estimated direct labor hours

= 1.40+12,000/2,400

= 1.40+5

= $6.40

Actual direct labor hours used for Job Q = 700

Manufacturing overhead applied to Job Q = Actual direct labor hours x Predetermined overhead rate

= 700 x 6.40

= $4,480

Job Cost Sheet (Job Q)
Direct materials	8,400
Direct labor cost	18,500
Applied overhead	4,480
Total cost	$31,380

Total manufacturing cost

$31,380

6.

Estimated direct labor hours = 2,400

Estimated fixed manufacturing overhead = $12,000

Estimated Variable manufacturing overhead = $1.40 per machine hour

Predetermined overhead rate =Estimated Variable manufacturing overhead + Estimated total fixed manufacturing overhead/Estimated direct labor hours

= 1.40+12,000/2,400

= 1.40+5

= $6.40

Actual direct labor hours = Actual direct labor hours for Job P + Actual direct labor hours for Job Q

= 1,500+700

= 2,200

Manufacturing overhead applied = Actual direct labor hours x Predetermined overhead rate

= 2,200 x 6.40

= $14,080

Actual manufacturing overhead = $15,000

Under applied manufacturing overhead = Actual manufacturing overhead- Manufacturing overhead applied

= 15,000-14,080

= $920

Total amount

$920

Underapplied

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