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. 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):
- What is the company’s predetermined overhead rate?
$6.00 per unit
- How much manufacturing overhead was applied to Job P and Job Q?
The calculated manufacturing overhead applied job-P is $8,400 and job-Q is $3,000.
- What is the direct labor hourly wage rate?
Direct labor hourly rate for job-P is $15 and for job-Q is $15.
- If Job P includes 20 units, what is its unit product cost? What is the total amount of manufacturing cost assigned to Job Q as of the end of March (including applied overhead)?
Calculated unit product cost of job-P is $2,120.
The calculated total manufacturing cost for job-P is $42,400.
The calculated total manufacturing cost of job-Q is $18,500
- Assume the ending raw materials inventory is $1,000 and the company does not use any indirect materials. Prepare the journal entries to record raw materials purchases and the issuance of direct materials for use in production.
Entry 1: Debit raw materials inventory $22,000 while crediting Accounts payable $22,000.
Entry 2: Work in process inventory is debited $22,000 and Raw materials inventory is credited $22,000.
- Assume that the company does not use any indirect labor. Prepare the journal entry to record the direct labor costs added to production.
Debit work in process $28,500 and credit wages payable $28,500.
- Prepare the journal entry to apply manufacturing overhead costs to production.
Debit work in process $11,400 and credit manufacturing overhead $11,400.