[The following information applies to the questions displayed below.] Sweeten Co
ID: 2425584 • Letter: #
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[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 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 avallable 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 varlable manufacturing overhead per direct labor-hour Estlmated total direct labor-hours to be worked Total actual manufacturing overhead costs Incurred $14,500 $ 1.90 2,900 $18,000 Direct materials Direct labor cost Actual direct labor-hours worked Job P Job Q $ 18,500 $ 8,900 $ 40,000 $10,000 2,000 000 500 X)Explanation / Answer
Income statement for march as per Absorption costing Sales- Job P- (25*$3500) 87500 Closing WIP of Job Q (Working Note 1) 22750 110250 Less Cost: Job Q (WN 1) 22750 Job P(WN 2) 73900 Profit before sselling and Admin expenses 13600 Less selling and admin expenses 10000 Profit 3600 Closing WIP of Job Q (Working Note 1) Direct Material $ 8,900.00 Direct Labour $ 10,000.00 Manufacturing Over head Variable OH absorbed (500*1.90)= 950 $ 3,850.00 Fixed Over head absorbed (14500*500/2500) = 2900 Total $ 22,750.00 Cost of Job P (Working Note 2) Direct Material $ 18,500.00 Direct Labour $ 40,000.00 Manufacturing Over head Variable OH absorbed (2000*1.90)= 3800 $ 15,400.00 Fixed Over head absorbed (14500*2000/2500) = 11600 Total $ 73,900.00
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