unction Company to just prices on the wymy vi une your and in veyanmy mivene, 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 $28,600 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.60 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 Molding Fabrication 2,500 1,500 4,000 Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour $ 12,250 $ 2.30 $ 16,350 $ 28,600 $ 3.10 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Job Q $ 12,500 $ 11,100 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Job P $ 22,000 $ 28,200 2,600 1,500 4,100 1,700 1,800 3,500 Total 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.
unction Company to just prices on the wymy vi une your and in veyanmy mivene, 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 $28,600 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $2.60 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 Molding Fabrication 2,500 1,500 4,000 Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine-hour $ 12,250 $ 2.30 $ 16,350 $ 28,600 $ 3.10 The direct materials cost, direct labor cost, and machine-hours used for Jobs P and Q are as follows: Job Q $ 12,500 $ 11,100 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Job P $ 22,000 $ 28,200 2,600 1,500 4,100 1,700 1,800 3,500 Total 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1
Solution 3:
Predetermined overhead rate = Estimated total overhead / Estimated machine hours
Manufacturing overhead applied = Actual machine hours * Overhead rate per machine hour
Manufacturing cost assigned to Jobs = Direct materials + Direct labor + Overhead applied
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