Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2448072 • 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 JobQ 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 Pand Q (all data and questions relate to the month of March) Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per direct labor-hour..... $10,000 $1.00 2,000 $12,500 Estimated total direct labor-hours to be worked Total actual manufacturing overhead costs incurred Job P $13,000 $21,000 Job Q Direct materials. Direct labor cost Actual direct labor-hours worked $8,000 $7,500 500 1,400Explanation / Answer
(10) The Work in process A/c will appear as under:
Work in Process A/c for the month of March
To Opening Balance $ -
To Direct Material (13,000+8,000) 21,000
To Direct Labour (21,000+7,500) 28,500
To Variable Mfg OH (1$ * 1900 DL Hrs) 1,900
To Fixed Mfg OH absorbed ($ 5*1500 DL Hrs) 9,500
By Finished Goods A/c $ 42,400
By Closing Balance 18,500
11) Schedule of Cost of Goo:
Opening inventory of Finished Goods $ ----
Add Cost of Goods manufactured 42,400
Cost of Goods available for Sale 42,400
Less Ending Finished Goods inventory ----__
Unadjusted Cost of Goods Sold 42,400
12) Cost of Goods Sold A/c Dr 42,400
To Finished Goods Control A/c 42,400
13) Amount of Under Applied or Over Applied
Actual Direct Labour Hours 1,900
Predetermined Mfg OH rate
Variable $ 1/per direct labour hour
Fixed $ 5/per direct labour hour
Manufacturing OH applied $ 11,400 ( variable + fixed )
Actual Manufacturing OH $ 12,500
Mfg OH applied $ 11,400
Under Applied OH $ 1,100
14) The journal entry would be:
Cost of Goods Sold A/c Dr 1,100
To Manufacturing OH Control A/c 1,100
15) Sales $ 60,000
Cost of Goods sold 43,500
Gross Margin 16,500
Selling & Admn Exp 14,000
Net Operating Income 2,500
To Opening Balance $ -
To Direct Material (13,000+8,000) 21,000
To Direct Labour (21,000+7,500) 28,500
To Variable Mfg OH (1$ * 1900 DL Hrs) 1,900
To Fixed Mfg OH absorbed ($ 5*1500 DL Hrs) 9,500
By Finished Goods A/c $ 42,400
By Closing Balance 18,500
Total 60,900 Total 60,900Related Questions
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