Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2408070 • Letter: S
Question
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 the March and Job Q was incomplete at the end of the 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):
1. What is the company's predetermined overrhead rate?
2. How much manufacturing over head was applied to Job P? Job Q?
3. Assume that ending raw materials inventory is $2,600 and the company does not use any indirect materials. Prepare the journa; entries to record new raw materials purchases and the issuance of direct materials for use in production.
4. Assume that the company does not use any indirect labor. Prepare the journal entry to record the direct labor costs added to production.
5. Prepare the journal entry to apply manufacturing over head costs to production.
6. Assume the ending raw materials inventory is $2,600 and the company does not use any indirect materials. Prepare schedule of cost of goods manufactured. 7. Prepare the journal entry to transfer costs from Work in Progress to finished goods
8. Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account.
9. Prepare a schedule of cost of goods sold.
10. Prepare the journal entry to transfer costs from Finished Goods to Cost of Goods Sold.
11. What is the amount of underapplied or overapplied overhead?
12. Prepare the journal entry to close the amount of underapplied or overapplied overhead to Cost of Goods Sold.
13. Assume that Job P includes 35 units that each sell for $2,600 and that the company’s selling and administrative expenses in March were $13,000. Prepare an absorption costing income statement for March.
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 the March and Job Q was incomplete at the end of the 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):
Explanation / Answer
Solution 1:
Predetermined overhead rate = Estimated overhead / Estimated direct labor hours
= [(3600*1.50) + $14,400] / 3600 = $5.50 per direct labor hour
Solution 2:
Manufacturing overhead applied to Job P = Direct labor hours for Job P * Predetermined overhead rate
= 2700 * $5.50 = $14,850
Manufacturing overhead applied to Job Q = Direct labor hours for Job Q * Predetermined overhead rate
= 800 * $5.50 = $4,400
Solution 3:
Solution 4:
Solution 5:
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Journal Entries - Sweeten Company Particulars Debit Credit Raw material inventory Dr $27,200.00 To Accounts Payable $27,200.00 (To record purchase of material) Work In Process Dr $24,600.00 To Raw material inventory $24,600.00 (To record issue of material into production)Related Questions
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