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): Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 13,750 $ 17,250 $ 31,000 Estimated variable manufacturing overhead per machine-hour $ 2.90 $ 3.70 Job P Job Q Direct materials $ 28,000 $ 15,500 Direct labor cost $ 33,000 $ 13,500 Actual machine-hours used: Molding 3,200 2,300 Fabrication 2,100 2,400 Total 5,300 4,700 Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month. 1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.) 1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)

Solution

Ans) Computation of plantwide predetermined overhead rate

Molding Fabrication

Estimated fixed manufacturing overhead $13750 $17250

Estimated Variable manufacturing overehead 7250 5550

(2500 X $2.9) (1500 X $3.7)

Estimated manufacturing overhead cost $21000 $22800

The predetermined overhead rate is computed as follows:

Estimated total manufacturing overhead (a) $21000 $22800

Estimated total direct labour hours (b) 2500 1500

Predetermined overhead rate (a) / (b) 8.4 per DLH 15.2 per DLH