Smithson Company uses a job-order costing system and has two manufacturing the y

Question

Smithson Company uses a job-order costing system and has two manufacturing the year departments-Molding and Fabrication. The company provided the following estimates at the beginning of 0,000 30,000 s 800,000 300,000 100,000 50,000 Fwed manufacturing overhead costs Variable manufacturing overheed per machine-hour 5.00$ 5.00 baring the yes the company had no beghning or ending iventores and it sarted,completed, and sold only twojobs-Job D5 and Job C-100. t prowided the folowinginformation relased to those two jobs Job D-75: Direct materials cost Direct labor cost Molding/Fabricator, Total 375,000 325,000 S 700000 200,000 % ,60,000 % 300000 15,000 5,000 0,000 Molding Fabricationota 300.000$250,000 $550,000 Direct materials cost Direct labor cost Machine-hours 175,000 225,000 $400,000 25.000 30,000 5,000 Smithson had no overapplied or underapplied manufacturing overheed during the year

Explanation / Answer

Answer 1-a Predetermined plantwide overhead rate per MH = [Total Fixed Manufacturing Overheads / Total Machine hours] + Variable manufacturing Overhead rate per machine hour Predetermined plantwide overhead rate per MH = [$11,00,000 / 50000 machine hours] + $5 = $27 per machine hour Answer 1-b Total manufacturing cost assigned to Jobs Job D-75 Job C-100 Direct Material cost $700,000 $550,000 Direct Labour cost $360,000 $400,000 Manufacturing Overheads $540,000 $810,000 Total manufacturing cost assigned to Jobs $1,600,000 $1,760,000 Answer 1-c Calculation of bid price Job D-75 Job C-100 Total manufacturing cost assigned to Jobs $1,600,000 $1,760,000 Bid Price = 150% of above cost $2,400,000 $2,640,000 Answer 1-d Job D-75 Job C-100 Cost of good sold Total manufacturing cost assigned to Jobs $1,600,000 $1,760,000 $3,360,000 Answer 2-a Computation of predetermined departmental overhead rate Molding Department Facbrication Department Fixed Manufacturing Overheads $800,000.00 $300,000.00 / Machine hours 20000 30000 Fixed Manufacturing Overhead rate $40.00 $10.00 Add : Variable Manufacturing Overhead rate $5.00 $5.00 Predetermined departmental overhead rate per MH $45.00 $15.00 Answer 2-b Total manufacturing cost assigned to Jobs Job D-75 Job C-100 Direct Material cost $700,000 $550,000 Direct Labour cost $360,000 $400,000 Manufacturing Overheads - Molding $675,000 $225,000 - Facbrication $75,000 $375,000 Total manufacturing cost assigned to Jobs $1,810,000 $1,550,000 Answer 2-c Calculation of bid price Job D-75 Job C-100 Total manufacturing cost assigned to Jobs $1,810,000 $1,550,000 Bid Price = 150% of above cost $2,715,000 $2,325,000 Answer 2-d Job D-75 Job C-100 Cost of good sold Total manufacturing cost assigned to Jobs $1,810,000 $1,550,000 $3,360,000

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