Sweeten Company had no jobs in progress at the beginning of March and no beginni
ID: 2605195 • Letter: S
Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. 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):
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.
1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)
Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 11,250 $ 15,750 $ 27,000 Estimated variable manufacturing overhead per machine-hour $ 1.90 $ 2.70Explanation / Answer
Answer 1. Predetermined Overhead Rate - Fixed Overhead = $27,000 (Total Overhead) / 4,000 Mach Hrs Predetermined Overhead Rate - Fixed Overhead = $6.75 per Mach Hr Total Predetermined Overhead Rate = $6.75 (Fixed) + $1.90 (Variable - Molding) + $2.70 (Variable - Fabrication) Total Predetermined Overhead Rate = $11.35 per Mach. Hr.
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