Question
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories....
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): Estimated total machine-hours used Estimated total fixed manufacturing overhead Estimated variable manufacturing overhead per machine- hour Molding Fabrication Total 2,500 1,500 4,000 $10,750 $ 15,450 $26,200 $ 1.79 $ 2.50 Job P $16,000 $23,400 Job Q $9,500 $8,700 Direct materials Direct labor cost Actual machine-hours used: Molding Fabrication Total 2,000 900 2,900 1,100 1,200 2,300 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.) Predetermined overhead rate per MH
Answers
1. Predetermined overhead rate = $8.55 per MH -->refer working note below
.
Working note - Calculation of predetermined overhead rate Molding Fabrication Total Estimated total machine-hours used (a) 2500 1500 Estimated variable manufacturing overhead per machine-hour (b) $1.70 $2.50 Estimated variable manufacturing overhead cost (c = a x b) $4,250 $3,750 $8,000
[$4,250 + $3,750]
Estimated total fixed manufacturing overhead (d) $26,200 Estimated total manufacturing overhead (e = c + d) $34,200 Estimated total machine hours (f) 4000 Predetermined overhead rate (e / f) $8.55
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