Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during MarchJob P and Job Q. 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):
MoldingFabricationTotalEstimated total machine-hours used2,5001,5004,000Estimated total fixed manufacturing overhead$10,000$15,000$25,000Estimated variable manufacturing overhead per machine-hour$1.40$2.20
Job PJob QDirect materials$13,000$8,000Direct labor cost$21,000$7,500Actual machine-hours used:Molding1,700800Fabrication600900Total2,3001,700
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
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 departmental predetermined overhead rates with machine-hours as the allocation base in both departments.
7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q?
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