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Sweeten Company had no jobs in progress at the beginning of the year and no beginning Inventories. It started, completed, and sold only two
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 year-Job 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 period's estimated level of production. Sweeten also estimated $33,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.70 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it 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: Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour Molding 2,500 $ 15,000 $ 3.40 Fabrication 1,500 Total 4,000 $ 18,000 $ 4.20 $ 33,000 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Direct materials Direct labor cost Actual machine-hours used: Fabrication Molding Total Job P $ 33,000 Job Q $ 18,000 $ 37,000 $ 15,500 3,700 2,800 2,600 6,300 2,900 5,700 Sweeten 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.
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