L lle amtoult lf ühderapplied (overapplied) manufacturing overhead different fro
ID: 2338741 • Letter: L
Question
L lle amtoult lf ühderapplied (overapplied) manufacturing overhead different from part (2) Additional student resources are available with Connect. Sweeten Company had no Jobs in progress at the beginning of March and no beginning invento LEARNING 0 ries. It started only two jobs during March- Job P and Job Q. Job P was completed and sold by4-2, 4-3, 4-4, 4-5, 4-6 the end of March and Job Q was incomplete at the end of March. The company uses a plantwide predetermined overhead rate based on direct labor-hours. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March): Estimated total fixed manufacturing overhead....... Estimated variable manufacturing overhead per $10,000 direct labor-hour... Estimated total direct labor hours to be worked Total actual manufacturing overhead costs incurred $1.00 2,000 $12,500 Job P Job Q Direct labor cost . .. Actual direct labor hours worked....... $21,000 $7,500 1,400 500 (Answer each question independently by always referring to the original data.) 1. What is the company's predetermined overhead rate? 2. How much manufacturing overhead was applied to Job P and Job Q? 3. What is the direct labor hourly wage rate? 4. If Job P includes 20 units, what is its unit product cost?Explanation / Answer
1)predetermined overhead rate = Estimated fixed overhead rate per DLH+Estimated variable overhead rate per DLH
= [10000/2000] + 1
= 5+1
=$ 6 per Direct labor hour
**Estimaed fixed overhead rate = estimaed fixed overhead /estimated direct labor hour
2)overhead applied to:
Job P= Actual hour worked * predetermined overhead rate
= 1400*6
= $ 8400
Job Q : 500*6
= 3000
3)Direct labor hourly wage rate = Actual direct labor cost for job P/Job Q/Actual direct labor hour worked for Job P /Job Q
= [21000/1400] or [7500/500]
= $ 15 per direct labor hour
4)Total cost =Direct material +Direct labor + overhead applied
= 13000 +21000+8400
= 42400
unit cost =Total cost /total units
= 42400/ 20
= $ 2120 per unit
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