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

Question

[The following information applies to the questions displayed below.] 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 avallable 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 varlable manufacturing overhead per direct labor-hour Estlmated total direct labor-hours to be worked Total actual manufacturing overhead costs Incurred $14,500 $ 1.90 2,900 $18,000 Direct materials Direct labor cost Actual direct labor-hours worked Job P Job Q $ 18,500 $ 8,900 $ 40,000 $10,000 2,000 000 500 X)

Explanation / Answer

JOURNAL ENTRY

FINISHED GOODS INVENTORY JOB P A/C...........................DR $72300

FINISHED GOODS INVENTORY JOB Q A/C...........................DR $22350

   TO WORK IN PROCESS JOB P A/C $72300

TO WORK IN PROCESS JOB P A/C $22350

JOB P JOB Q DIRECT MATERIAL 18500 8900 DIRECT LABOUR COST 40000 10000 VARIABLE MANUFACTURING OVERHEAD JOB P (2000 * $1.9) 3800 JOB Q (500 * $1.9) 950 FIXED MANUFACTURING OVERHEAD RATE JOB P [($14500 / 2900) * 2000] 10000 JOB P [($14500 / 2900) * 500] 2500 TOTAL WORK IN PROCESS 72300 22350

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