Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year-Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period's estimated level of production. Sweeten also estimated $29,400 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.80 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour Molding 2,500 $ 12,750 $ 2.50 Fabrication 1,500 Total 4,000 $ 16,650 $ 3.30 $ 29,400 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Job P $ 24,000 Job Q $ 13,500 $ 29,800 $ 11,900 2,800 1,900 1,700 4,500 2,000 3,900 Total Sweeten Company had no overapplied or underapplied manufacturing overhead costs during the year. 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 predetermined departmental overhead rates with machine-hours as the allocation base in both departments. Foundational 2-7 (Algo) 7. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. If Job P includes 20 units and Job Q includes 30 units, what selling price would the company establish for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started,
completed, and sold only two jobs during the year-Job P and Job Q. The company uses a plantwide predetermined
overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be
required for the period's estimated level of production. Sweeten also estimated $29,400 of fixed manufacturing overhead
cost for the coming period and variable manufacturing overhead of $2.80 per machine-hour.
Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide
overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following
additional information to enable calculating departmental overhead rates:
Estimated total machine-hours used
Estimated total fixed manufacturing overhead
Estimated variable manufacturing overhead per machine-hour
Molding
2,500
$ 12,750
$ 2.50
Fabrication
1,500
Total
4,000
$ 16,650
$ 3.30
$ 29,400
The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows:
Direct materials
Direct labor cost
Actual machine-hours used:
Molding
Fabrication
Job P
$ 24,000
Job Q
$ 13,500
$ 29,800
$ 11,900
2,800
1,900
1,700
4,500
2,000
3,900
Total
Sweeten Company had no overapplied or underapplied manufacturing overhead costs during the year.
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 predetermined departmental overhead rates with
machine-hours as the allocation base in both departments.
Foundational 2-7 (Algo)
7. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish
selling prices for all of its jobs. If Job P includes 20 units and Job Q includes 30 units, what selling price would the company establish
for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis?
Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.
Transcribed Image Text:Sweeten Company had no jobs in progress at the beginning of the year and no beginning inventories. It started, completed, and sold only two jobs during the year-Job P and Job Q. The company uses a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, it estimated that 4,000 machine-hours would be required for the period's estimated level of production. Sweeten also estimated $29,400 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.80 per machine-hour. Because Sweeten has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following additional information to enable calculating departmental overhead rates: Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour Molding 2,500 $ 12,750 $ 2.50 Fabrication 1,500 Total 4,000 $ 16,650 $ 3.30 $ 29,400 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Job P $ 24,000 Job Q $ 13,500 $ 29,800 $ 11,900 2,800 1,900 1,700 4,500 2,000 3,900 Total Sweeten Company had no overapplied or underapplied manufacturing overhead costs during the year. 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 predetermined departmental overhead rates with machine-hours as the allocation base in both departments. Foundational 2-7 (Algo) 7. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. If Job P includes 20 units and Job Q includes 30 units, what selling price would the company establish for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.
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