14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q

Based on the costs and the markup percentage, the selling price of Job P would be $4,545 and for Job Q would be $1,848.

Molding department:
= Variable overhead cost per hour + (Estimated overhead / Estimated machine hours used)

= 1.40 + (10,000 / 2,500)

= $5.40

Fabrication Department:

= 2.20 + (15,000 / 1,500)

= $12.20

= (Molding department hours x Overhead rate) + (Fabrication department hours x Overhead rate)

= (1,700 x 5.40) + (600 x 12.20)

= $16,500

= (800 x 5.40) + (900 x 12.20)

= $15,300

= ((1 + markup percentage) x (Direct materials + Direct labor + Manufacturing overhead) ) / Number of Job Q units

= ( ( 1 + 80%) x (13,000 + 21,000 + 16,500)) / 20

= $4,545

= ( ( 1 + 80%) x (8,000 + 7,500 + 15,300) ) / 30

= $1,848

In conclusion, the selling prices are $4,545 and $1,848 respectively.

Find out more on marking up prices at link.

Completion Question:

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):

                                                               MoldingFabrication   Total

Estimated total machine-hours used  2,5001,500   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.

Sweeten Company

Total manufacturing costs:

                                                     Job P          Job Q

Direct materials                          $13,000$8,000  

Direct labor cost                         $21,000$7,500

Variable overhead cost               $3,220      $3,740

Fixed overhead costs                $10,000      $15,000

Total manufacturing costs        $47,220     $34,240

Markup (80%)                             $37,776    $27,392

Estimated Selling Price         $84,996     $61,632

Explanation:

a) Data and Calculations:

                                                               MoldingFabrication   Total

Estimated total machine-hours used  2,5001,500   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

Estimated variable

 manufacturing overhead

  machine-hour                $1.40             $2.20

Variable Manufacturing

  overhead cost            $3,220           $3,740