Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturin
g 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): Molding Fabrication Total Estimated total machine-hours used 2,500 1,500 4,000 Estimated total fixed manufacturing overhead $ 10,000 $ 15,000 $ 25,000 Estimated variable manufacturing overhead per machine-hour $ 1.40 $ 2.20 Job P Job Q Direct materials $ 13,000 $ 8,000 Direct labor cost $ 21,000 $ 7,500 Actual machine-hours used: Molding 1,700 800 Fabrication 600 900 Total 2,300 1,700 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 answer:
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Answer:
1. Break even points in units will be = 2,700 units
2. Break-even point in dollar sales = $56,700
3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units
Explanation:
Break even point =
Fixed Cost = $8,100
Contribution per unit = Sale Price - Variable Cost = $21 - $18 = $3
1. Break even points in units will be
=
2. Break-even point in dollar sales
= Break even point in units X Sale price per unit
= 2,700 units X $21 = $56,700
3. In case fixed expense increase by $600 then Break even point in unit sales
= = 2,900 units
Final Answer
1. Break even points in units will be = 2,700 units
2. Break-even point in dollar sales = $56,700
3. In case fixed expense increase by $600 then Break even point in unit sales = 2,900 units