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 $25,400 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.80 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: Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 10,250 $ 15,150 $ 25,400 Estimated variable manufacturing overhead per machine-hour $ 1.50 $ 2.30 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 $ 14,000 $ 8,500 Direct labor cost $ 21,800 $ 7,900 Actual machine-hours used: Molding 1,800 900 Fabrication 700 1,000 Total 2,500 1,900 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. Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar. 1. What is the company’s plantwide predetermined overhead rate? 2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? 3. What is the total manufacturing cost assigned to Job P?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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
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 | $ 10,250 | $ 15,150 | $ 25,400 |
| Estimated variable manufacturing overhead per machine-hour | $ 1.50 | $ 2.30 |
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 | $ 14,000 | $ 8,500 |
| Direct labor cost | $ 21,800 | $ 7,900 |
| Actual machine-hours used: | ||
| Molding | 1,800 | 900 |
| Fabrication | 700 | 1,000 |
| Total | 2,500 | 1,900 |
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.
Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar.
1. What is the company’s plantwide predetermined overhead rate?
2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q?
3. What is the total
4. If Job P includes 20 units, what is its unit product cost?
5. What is the total manufacturing cost assigned to Job Q?
6. If Job Q includes 30 units, what is its unit product cost?
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?
8. What is Sweeten Company’s cost of goods sold for the year?
9. What are the company’s predetermined overhead rates in the Molding Department and the Fabrication Department?
10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q?
11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?
12. If Job P includes 20 units, what is its unit product cost?
13. If Job Q includes 30 units, what is its unit product cost?
14. 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?
15. What is Sweeten Company’s cost of goods sold for the year?
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7. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total
8. What is Sweeten Company’s cost of goods sold for the year?
9. What are the company’s predetermined
by Bartleby Expert10. How much manufacturing
11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q?
12. If Job P includes 20 units, what is its unit product cost?
by Bartleby Expert13. If Job Q includes 30 units, what is its unit product cost?
14. Assume that Sweeten Company uses cost-plus pricing (and a markup percentage of 80% of total
15. What is Sweeten Company’s cost of goods sold for the year?
by Bartleby Expert4. If Job P includes 20 units, what is its unit product cost?
5. What is the total
6. If Job Q includes 30 units, what is its unit product cost?
by Bartleby Expert
