Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during MarchJob P and
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during MarchJob P and Job Q. Job P was completed and sold by the end of March and Job Q was incomplete at the end of 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 P and Q (all data and questions relate to the month of March): Estimated total fixed manufacturing overhead $ 11,000 Estimated variable manufacturing overhead per direct labor-hour $ 1.20 Estimated total direct labor-hours to be worked 2,200 Total actual manufacturing overhead costs incurred $ 12,700 Job P Job Q Direct materials $ 13,200 $ 8,200 Direct labor cost $ 16,900 $ 7,800 Actual direct labor-hours worked 1,300 600
What is the companys predetermined overhead rate? (Round your answer to 2 decimal places.)
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2. How much manufacturing overhead was applied to Job P and Job Q?
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3. What is the direct labor hourly wage rate?
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4. If Job P includes 24 units, what is its unit product cost?
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5 What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)?
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6. What is the amount of underapplied or overapplied overhead?
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7. Will your answer to question 6 increase or decrease unadjusted cost of goods sold?
Increase | |
Decrease |
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8. If Sweeten Company requisitioned $24,000 from raw materials inventory during March, then how much indirect materials cost would be included in Manufacturing Overhead Incurred?
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9. If Sweeten Companys labor time tickets totaled $28,800 for the month of March, then how much indirect labor cost would be included in Manufacturing Overhead Incurred?
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10. Calculate the cost of goods sold using the direct method.
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11. Calculate the cost of goods manufactured using the indirect method.
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12. Calculate the cost of goods sold using the indirect method.
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13. How would you revise your answer to question 11 if the company had beginning work in process inventory of $8,200?
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14. How would you revise your answer to question 12 if the company had beginning finished goods inventory of $12,200?
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15. Assume that Job P includes 24 units that each sell for $2,600 and that the companys selling and administrative expenses in March were $20,000. Prepare an absorption costing income statement for March.
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