Question
Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs
Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the yearJob P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the periods estimated level of production. Sweeten also estimated $32,600 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.60 per machine-hour.
Because Sweeten has two manufacturing departmentsMolding and Fabricationit is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates:
MoldingFabricationTotalEstimated total machine-hours used2,5001,5004,000Estimated total fixed manufacturing overhead$ 14,750$ 17,850$ 32,600Estimated variable manufacturing overhead per machine-hour$ 3.30$ 4.10The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows:
Job PJob QDirect materials$ 32,000$ 17,500Direct labor cost$ 36,200$ 15,100Actual machine-hours used:Molding3,6002,700Fabrication2,5002,800Total6,1005,500Sweeten Company had no overapplied or underapplied manufacturing overhead costs during the year.
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 predetermined departmental overhead rates with machine-hours as the allocation base in both departments.
11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? Note: Do not round intermediate calculations. 12. If Job P includes 20 units, what is its unit product cost? Note: Do not round intermediate calculations. 13. If Job Q includes 30 units, what is its unit product cost? Note: Do not round intermediate calculations. Round your 14. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. If Job P includes 20 units and Job Q includes 30 units, what selling price would the company establish for Jobs P and Q ? What are the selling prices for both jobs when stated on a per unit basis? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. 15. What is Sweeten Company's cost of goods sold for the year? Note: Do not round intermediate calculations. 11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? Note: Do not round intermediate calculations. 12. If Job P includes 20 units, what is its unit product cost? Note: Do not round intermediate calculations. 13. If Job Q includes 30 units, what is its unit product cost? Note: Do not round intermediate calculations. Round your 14. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. If Job P includes 20 units and Job Q includes 30 units, what selling price would the company establish for Jobs P and Q ? What are the selling prices for both jobs when stated on a per unit basis? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. 15. What is Sweeten Company's cost of goods sold for the year? Note: Do not round intermediate calculationsStep by Step Solution
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