Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2418804 • Letter: S
Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the 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):
2. How much manufacturing overhead was applied to Job P and Job Q? (Round your intermediate calculations to 2 decimal places.)
3.
What is the direct labor hourly wage rate
4-a.
If Job P includes 20 units, what is its unit product cost?
4-b.
What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)?
5.
Assume the ending raw materials inventory is $1,300 and the company does not use any indirect materials. Prepare the journal entries to record raw materials purchases and the issuance of direct materials for use in production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
6.
Assume that the company does not use any indirect labor. Prepare the journal entry to record the direct labor costs added to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)v
7.
Prepare the journal entry to apply manufacturing overhead costs to production. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
8.
Assume the ending raw materials inventory is $1,300 and the company does not use any indirect materials. Prepare a schedule of cost of goods manufactured.
9.
Prepare the journal entry to transfer costs from Work in Process to Finished Goods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
10.
Prepare a completed Work in Process T-account including the beginning and ending balances and all debits and credits posted to the account.
11
Prepare a schedule of cost of goods sold
12.
Prepare the journal entry to transfer costs from Finished Goods to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
13.
What is the amount of underapplied or overapplied overhead?
14.
Prepare the journal entry to close the amount of underapplied or overapplied overhead to Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
15.
Assume that Job P includes 20 units that each sell for $3,500 and that the company’s selling and administrative expenses in March were $20,500. Prepare an absorption costing income statement for March.
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. It started only two jobs during March—Job P and Job Q. Job P was completed and sold by the end of the March and Job Q was incomplete at the end of the 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):
Explanation / Answer
2
Calculation of manufacturing overhead applied to Job P and Job Q:
Estimated total fixed manufacturing overhead
$ 11,500
Estimated total direct labor-hours to be worked
2,300
Plantwide predetermined overhead rate = 11500/2300 =
$ 5
Job P
Job Q
Actual direct labor-hours worked
1,400
650
Plantwide predetermined overhead rate
$ 5
$ 5
Manufacturing overhead was applied
$ 7,000
$ 3,250
(1400*5)
(650*5)
3
Calculation of direct labor hourly wage rate:
Total Direct Labor Cost (19600+9100)
$ 28,700
Total Actual direct labor-hours worked = (1400+650)
2,050
Direct labor hourly wage rate = (28700 /2050)
$ 14
4-a
Calculation of unit product cost for Job P:
Direct materials
$ 14,500
Direct labor cost
$ 19,600
Manufacturing overhead applied
$ 7,000
Total Manufacturing Cost
$ 41,100
Number of units
20
Unit product cost = 41100/20
$ 2,055
4-b
Calculation of total amount of manufacturing cost assigned to Job Q:
Direct materials
$ 8,300
Direct labor cost
$ 9,100
Manufacturing overhead applied
$ 3,250
Total amount of manufacturing cost assigned to Job Q:
$ 20,650
2
Calculation of manufacturing overhead applied to Job P and Job Q:
Estimated total fixed manufacturing overhead
$ 11,500
Estimated total direct labor-hours to be worked
2,300
Plantwide predetermined overhead rate = 11500/2300 =
$ 5
Job P
Job Q
Actual direct labor-hours worked
1,400
650
Plantwide predetermined overhead rate
$ 5
$ 5
Manufacturing overhead was applied
$ 7,000
$ 3,250
(1400*5)
(650*5)
3
Calculation of direct labor hourly wage rate:
Total Direct Labor Cost (19600+9100)
$ 28,700
Total Actual direct labor-hours worked = (1400+650)
2,050
Direct labor hourly wage rate = (28700 /2050)
$ 14
4-a
Calculation of unit product cost for Job P:
Direct materials
$ 14,500
Direct labor cost
$ 19,600
Manufacturing overhead applied
$ 7,000
Total Manufacturing Cost
$ 41,100
Number of units
20
Unit product cost = 41100/20
$ 2,055
4-b
Calculation of total amount of manufacturing cost assigned to Job Q:
Direct materials
$ 8,300
Direct labor cost
$ 9,100
Manufacturing overhead applied
$ 3,250
Total amount of manufacturing cost assigned to Job Q:
$ 20,650
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