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):
Molding Fabrication
Total
Estimated total machine-hours used
2,500
1,500 4,000
Estimated total fixed manufacturing overhead
$10,750 $
15,450 $26,200
Estimated variable manufacturing overhead per
machine-hour
$
1.70 $
2.50
Job P
Job Q
Direct materials
$16,000 $9,500
Direct labor cost
$23,400 $8,700
Actual machine-hours used:
Molding
2,000 1,100
Fabrication
900 1,200
Total
2,900 2,300
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.
What was the company's plantwide predetermined overhead rate?
Predetermined Overhead Rate = Estimated Fixed Overhead/Estimated Direct Labor Hours + Variable Overhead
Rate Per Hour
Estimated total overhead = Estimated total fixed manufacturing overhead (26,200) + variable overhead molding
(machine hours:2500*var overhead per machine hour molding:1.70) + variable overhead fabrication (machine
hours:1500*var overhead per machine hour fabrication:2.50) = 26200 + 4250 + 3750 = 34,200
1. Plantwide predetermined rate = estimated total overhead (34,200)\estimated total machine hours (4000) =
8.55
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