[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

Estimated total manufacturing overheads = $14500 + 1.90*2900 = $20010

Pre-determined overhead rate = $ 20010 / 2900 = $6.90

Manufacturing Overhead applied @ $6.90 per direct labour hour worked

JOB P = 2000*6.90 = $13800

JOB Q = 500*6.90 = $ 3450

Therefore total manufacturing overhead = 13800+3450= $ 17250

WORK-IN-PROCESS(ONLY FOR JOB Q) Beg Bal 0 Direct Materials Q 8900 Direct Labour Q 10000 Manufacturing Overhead Q 3450 CLOSING BAL 22350 22350

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