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 $25,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.70 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: Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 10,000 $ 15,000 $ 25,000 Estimated variable manufacturing overhead per machine-hour $ 1.40 $ 2.20 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Job P Job Q Direct materials $ 13,000 $ 8,000 Direct labor cost $ 21,000 $ 7,500 Actual machine-hours used: Molding 1,700 800 Fabrication 600 900 Total 2,300 1,700 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 2-6 (Static) 6. If Job Q includes 30 units, what is its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

Name: Sweeten Company had no jobs in progress at the beginning of the year a
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Description: 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 machin

Answered: 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…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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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 $25,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.70 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:

	Molding	Fabrication	Total
Estimated total machine-hours used	2,500	1,500	4,000
Estimated total fixed manufacturing overhead	$ 10,000	$ 15,000	$ 25,000
Estimated variable manufacturing overhead per machine-hour	$ 1.40	$ 2.20

The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows:

	Job P	Job Q
Direct materials	$ 13,000	$ 8,000
Direct labor cost	$ 21,000	$ 7,500
Actual machine-hours used:
Molding	1,700	800
Fabrication	600	900
Total	2,300	1,700

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 2-6 (Static)

6. If Job Q includes 30 units, what is its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

Expert Solution

Step 1 Introduction

The pre-determined overhead rate is calculated as estimated overhead cost divided by estimated base activity.

The unit cost is calculated as total cost divided by number of units.

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