The following information applies to the questions displayed below] Smithson Com

Question

The following information applies to the questions displayed below] Smithson Company uses a job-order costing system and has two manufacturing departments-Molding and Fabrication. The company provided the following estimates at the beginning of the year Molding Fabrication 22,000 32,000 54.000 Machine-hours Flxed manufacturing overhead costs Variable manufacturing overhead per machine-hour $ 5.00 S 5.00 $ 760,000 s 230,000 s 990,000 During the year, the company had no beginning or ending inventories and it started. completed, and sold only two jobs-Job D-75 and Job C-100. It provided the following information related to those two jobs: Job D-75 Direct materials cost 374.000 $ 326,000 $700,000 Direct labor cost Machine-hours Molding Fabrication Total $ 220,000 $ 150,000 $ 370,000 15,000 7000 22.000 Job C-100 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total 300,000 $290,000 $590,000 130,000 $240,000 $ 370,000 7000 25,000 32000 Smithson had no overapplied or underapplied manufacturing overhead during the year

Explanation / Answer

1-a Compute the predetermined plantwide overhead rate Total Fixed manufacturing overhead costs $990,000 Add : Total Variable manufacturing overhead costs 270000 (22000*5) + (32000*5) Total Overhead $1,260,000 Machine Hours 54000 Predetermined plantwide overhead rate $23.33 1-b Compute the total Manufacturing overhead costs assigned to Job D-75 and Job C-100 Total Manufacturing overhead costs = Direct Materials + Direct Labor + (predetermined overhead rate*Machine Hours) Job D-75 Direct Materials $700,000 Direct Labor Cost $370,000 Predetermined overhead $513,333.33 Total Manufacturing overhead costs $1,583,333.33 Job C-100 Direct Materials $590,000 Direct Labor Cost $370,000 Predetermined overhead $746,666.67 Total Manufacturing overhead costs $1,706,666.67 1-c If Smithson establishes bid prices that are 120% of total manufacturing costs, what bid price it have established for Job D-75 and Job C-100 Job D-75 1583333.33*120% $1,900,000.00 Job C-100 1706666.67*120% $2,048,000.00 1-d What is Smithson's cost of goods sold for the year Job D-75 1583333.333 Job C-100 1706666.667 Cost of Goods Sold 3290000

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