Skip to question [The following information applies to the questions displayed below.] 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 2-3 (Static) 3. What is the total manufacturing cost assigned to Job P? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

Skip to question [The following information applies to the questions displayed below.] 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 2-3 (Static) 3. What is the total manufacturing cost assigned to Job P? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Foundational 15 (Static) [LO2-1, LO2-2, LO2-3, LO2-4]

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[The following information applies to the questions displayed below.]

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 2-3 (Static)

3. What is the total manufacturing cost assigned to Job P? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)

Expert Solution

Step 1

The plantwide overhead rate is a single overhead rate that a company uses to allocate all of its manufacturing overhead costs to all jobs

Plantwide overhead rate = Total manufacturing cost/ Total machine hours

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