FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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9

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 $29,800 of fixed manufacturing overhead
cost for the coming period and variable manufacturing overhead of $2.90 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:
Direct materials
Direct labor cost
Actual machine-hours used:
Molding
Fabrication
Total
Estimated total machine-hours used
Estimated total fixed manufacturing overhead
Estimated variable manufacturing overhead per machine-hour
The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows:
Manufacturing overhead applied
Job P
$ 25,000
$ 30,600
$
Job P
2,900
1,800
4,700
60,300 $
Molding
2,500
$ 13,000
$ 2.60
2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q?
Note: Do not round intermediate calculations.
Job Q
$ 14,000
$ 12,300
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.
Job Q
2,000
2,100
4,100
Fabrication
1,500
$ 16,800
$ 3.40
30,400
Total
4,000
$ 29,800
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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 $29,800 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.90 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: Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Manufacturing overhead applied Job P $ 25,000 $ 30,600 $ Job P 2,900 1,800 4,700 60,300 $ Molding 2,500 $ 13,000 $ 2.60 2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? Note: Do not round intermediate calculations. Job Q $ 14,000 $ 12,300 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. Job Q 2,000 2,100 4,100 Fabrication 1,500 $ 16,800 $ 3.40 30,400 Total 4,000 $ 29,800
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