Sweeten Company had no jobs in progress at the beginning of

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 March Job 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) Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour Molding Fabrication Total 4,000 $12,250 $16,350 $28,600 2,500 1,500 $ 2.30 3.10 Job P Job Q $22,000 $12,500 $28,200 $11,100 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,600 1,500 4,100 1,700 1,800 3,500 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

Solution

Working Note

Plantwide overhead rate = total overhead / total hours

= 28600 / 4000

= 7.15 per hour

Particulars	Job P	Job Q
Direct Materials	22,000.00	12,500.00
Direct Labors	28,200.00	11,100.00
Molding Variable Overhead (2600 x 2.3) and (1700 x 2.3)	5,980.00	3,910.00
Fabrication Variable Overhead (1500 x 3.1) and (1800 x 3.1)	4,650.00	5,580.00
Fixed Overhead
Molding Overhead (2600 x 7.15) and (1700 x 2.3)	18,590.00	12,155.00
Fabrication Overhead (1500 x 7.15) and (1800 x 2.3)	10,725.00	12,870.00
Total Manufacturing Cost	90,145.00	58,115.00
Mark up on cost (80%)	72,116.00	46,492.00
Total Price of the Job (A)	162,261.00	104,607.00
No of Units (B)	20.00	30.00
Per Unit Price (A/B)	8,113	3,487