Sweeten Company had no jobs in progress at the beginning of March and no beginni

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): Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per direct labor-hour Estimated total direct labor-hours to be worked Total actual manufacturing overhead costs incurred $13,000 $ 1.60 2,600 17,000 Direct materials Direct labor cost Actual direct labor-hours worked Job P Job Q $17,500 $ 8,600 $28,900 $13,600 700 80o

Explanation / Answer

1. pre- determined overhead rate = estimated manufactured overhead cost / estimated direct labour hour

= $17160 / 2600 hour

= $6.6 per hour

Note:- Fixed manufactured cost = $13000

   variable manufactured cost ($1.6 *2600 hour) = $4160

$17160

2. Job P Job Q

   Manufacturing applied overhead 1700 hour *$6.6 800 hour *$6.6

=$11220 =$5280

Job P Job Q

3. Direct labour hourly wages rate $28900 / 1700 hour $13600 / 800 hour

   =$17 =$17

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