Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2332309 • Letter: S
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):
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.
5. What was the total manufacturing cost assigned to Job Q?
6. If Job Q included 30 units, what was its unit product cost?
7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q?
8. What was Sweeten Company’s cost of goods sold for March?
Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 10,250 $ 15,150 $ 25,400 Estimated variable manufacturing overhead per machine-hour $ 1.50 $ 2.30Explanation / Answer
Plant wide OH rate per MH: Fixed Manufacturing OH (25400/4000 MH) 6.35 Variable Manaufacturing OH 3.8 Total Plantwide OH rate 10.15 Per MH Req5. Manufacturing Cost of Job Q: Direct Material 8500 Direct Labour 7900 Overheads applied 19285 (1900 MH @ 10.15 per MH) Total Manufacturing Cost 35685 Req 6. Total Manufacturing cost of Job Q: 35685 Divide: Number of units 30 Cost per unit 1189.5 Req 7. Total Manufacturing cost and Selling price per unit: Job P Job Q Direct material 14000 8500 Direct Labour 21800 7900 Overheads applied Job P(2500 H @10.15) 25375 Job Q (1900 MH @10.15) 19285 Total Manufacturing Cost 61175 35685 Add: Markup @ 80% of cost 48940 28548 Selling price 110115 64233 Divide: Number of units 20 30 Selling price per unit 5505.75 2141.1 Req 8. Cost of goods sold: Cost of Job P 61175 Cost of Job Q: 35685 Total cost of goods sold 96860
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