Reference no: EM131288607

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 March and Job Q was incomplete at the end of 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                                                 $              10,000

Estimated variable manufacturing overhead per direct labor-hour                        $                   1.00       

Estimated total direct labor-hours to be worked                                                                   2,000    

Total actual manufacturing overhead costs incurred                                     $              12,500

                                                                                                Job P                                     Job Q

Direct materials                                                                $              13,000                 $              8,000    

Direct labor cost                                                               $              21,000                 $              7,500    

Actual direct labor-hours worked                                                          1,400                                     500        

1. What is the company’s predetermined overhead rate?

2. How much manufacturing overhead was applied to Job P and Job Q?

3. What is the direct labor hourly wage rate?

4. If Job P includes 20 units, what is its unit product cost?

5. What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)?

6. What is the amount of underapplied or overapplied overhead?

7. Will your answer to question 6 increase or decrease unadjusted cost of goods sold?

8. If Sweeten Company requisitioned $24,000 from raw materials inventory during March, then how much indirect materials cost would be included in Manufacturing Overhead Incurred?

9. If Sweeten Company’s labor time tickets totaled $33,000 for the month of March, then how much indirect labor cost would be included in Manufacturing Overhead Incurred?

10. Calculate the cost of goods sold using the direct method.

11. Calculate the cost of goods manufactured using the indirect method.

12. Calculate the cost of goods sold using the indirect method.

13. How would you revise your answer to question 11 if the company had beginning work in process inventory of $8,000?

14. How would you revise your answer to question 12 if the company had beginning finished goods inventory of $12,000?

15. Assume that Job P includes 20 units that each sell for $3,000 and that the company’s selling and administrative expenses in March were $14,000. Prepare an absorption costing income statement for March.