Business, 12.02.2021 17:00, andreanb9632

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 company's predetermined overhead rate? How much manufacture overhead was applied to Job P and Job Q? What is the direct labor hourly wage rate? If Job P includes 20 units, what is its unit product cost? What is the total amount of manufacture cost assigned to Job Q as of the end of march (including applied overhead)? Assume the ending raw material inventory is $1,000 and the company does not use and indirect materials. Prepare then journal entries to record raw materials purchases and the issuance of direct materials for use in production. Assume that the company does not use any indirect labor. Prepare the journal entry to record the direct labor costs added to production. Prepare the journal entry to apply manufacture overhead costs to production. Assume the ending raw material inventory is $1,000 and the company does not use any indirect materials. Prepare a schedule of cost of goods manufactured. Prepare the journal entry to transfer costs from Work in Process to Finished Goods. Prepare a completed work in process T-account including the beginning and ending balance and all debits and credits posted to the account. Prepare a schedule of cost of goods sold. Prepare the journal entry to transfer costs from Finished Goods to Cost of Goods Sold. What is the amount of underapplied or overapplied overhead. Prepare the journal entry to close the amount of underapplied or overapplied overhead to Cost of Goods Sold. Assume that job P includes 20 units that each sell for $3,000 and that the companys selling and administrative expense is March were $14,000. Prepare an absorption costing income statement for March. Estimated total fixed manufacture over head $10,000

Estimated variable manufacture overhead per direct labor hour $1.00

Estimated total direct labour hours to be worked 2,000

Total Manufacturing overhead costs incurred $12,500

Job P /Job Q

Direct Material $13,000 /$8,000

Direct Labor Cost $21,000 /$7,500

Actual Direct Labor-hours worked 1,400 /500

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answered: alexandergonzalez38

Sweeten Company

1. Predetermined overhead rate is:

= $6.00 per DLH

2. Manufacturing overhead applied to Job P and Job Q:

Job P Job Q

= $8,400 $3,000

3. The direct labor hourly wage rate:

= $15 per DLH

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

= $2,120

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

= $3,000

6. Assuming the ending Raw Material Inventory = $1,000, Journal Entries to record Raw Materials Purchases and the Issuance of Direct Materials for use in production:

Debit Raw Materials Inventory $22,000

Credit Accounts Payable/Cash $22,000

To record the purchase of raw materials.

Debit Work in Process $21,000

(Job P $13,000

Job Q $8,000)

Credit Raw Materials Inventory $21,000

To record the issuance of raw materials to Work in Process.

7. Assuming no indirect labor, Journal Entry to record the direct labor costs added to production:

Debit Job P $21,000

Debit Job Q $7,500

Credit Factory Wages $28,500

To record direct labor costs to production.

8. Journal Entry to apply manufacturing overhead costs to production:

Debit Job P $8,400

Debit Job Q $3,000

Credit Manufacturing overhead $11,400

To apply manufacturing overhead costs to production.

9. Assuming the ending raw material inventory is $1,000, A Schedule of Cost of Goods Manufactured:

Job P

Direct Material $13,000

Direct Labor Cost 21,000

Manufacturing Overhead applied 8,400

Total cost of goods manufactured $42,400

10. Journal entry to transfer costs from Work in Process to Finished Goods:

Debit Finished Goods Inventory $42,400

Credit Work in Process: Job P $42,400

To transfer costs from WIP to Finished Goods.

11. Work in Process T-account with beginning and ending balance

Work in Process

Account Titles Debit Credit

Beginning balance $0

Direct Material $21,000

Direct Labor Cost 28,500

Manufacturing overhead 11,400

Finished Goods Inventory $42,400

Balance 18,500

Totals $60,900 $60,900

12. A Schedule of Cost of Goods Sold:

Unit of Goods Sold = 20

Unit cost = $2,120

Cost of goods sold = $42,400

13. Journal Entry to transfer costs from Finished Goods to Cost of Goods Sold:

Debit Cost of Goods Sold $42,400

Credit Finished Goods Sold $42,400

To transfer costs from Finished Goods to Cost of Goods Sold.

14. The amount of underapplied or overapplied overhead:

= $1,100

15. Journal Entry to close the amount of underapplied or overapplied overhead to Cost of Goods Sold:

Debit Cost of Goods Sold $1,110

Credit Manufacturing Overhead $1,110

To close the amount of underapplied overhead to Cost of Goods Sold.

16. Assuming Job P includes 20 units that each sell for $3,000 and that the company's selling and administrative expense is March were $14,000, Absorption Costing Income Statement for March:

Sales Revenue $60,000

Cost of Goods Sold 43,500

Gross profit $16,500

Selling and

Administrative

Expense 14,000

Net Income $2,500

Explanation:

a) Data and Calculations:

Predetermined overhead rate is based on direct labor hours

Estimated total fixed manufacturing overhead $10,000

Estimated variable manufacturing overhead per direct labor hour $1.00