Question

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		Total
Machine-hours		24,000		34,000	58,000
Fixed manufacturing overhead costs	$	770,000	$	230,000	$ 1,000,000
Variable manufacturing overhead per machine-hour	$	5.00	$	5.00

  

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:	Molding		Fabrication		Total
Direct materials cost	$	373,000	$	326,000	$	699,000
Direct labor cost	$	250,000	$	170,000	$	420,000
Machine-hours		17,000		7,000		24,000

  

Job C-100:	Molding		Fabrication		Total
Direct materials cost	$	290,000	$	270,000	$	560,000
Direct labor cost	$	160,000	$	300,000	$	460,000
Machine-hours		7,000		27,000		34,000

  
Smithson had no overapplied or underapplied manufacturing overhead during the year.

eBook & Resources

eBook: JOB-ORDER COSTING—AN EXAMPLE – LO 1eBook: JOB-ORDER COSTING—AN EXAMPLE – LO 2eBook: JOB-ORDER COSTING—AN EXAMPLE – LO 3

8.

value:
3.00 points

Required information

Required:

Assume Smithson uses a plantwide overhead rate based on machine-hours.

1-a.	Compute the predetermined plantwide overhead rate. (Round your answer to 2 decimal places.)

   

Predetermined overhead rate

$  per MH

  

1-b.	Compute the total manufacturing costs assigned to Job D-75 and Job C-100. (Round your intermediate calculations to 2 decimal places.)

   

	Total Manufacturing Cost
Job D-75	$
Job C-100	$

  

1-c.	If Smithson establishes bid prices that are 120% of total manufacturing costs, what bid price would it have established for Job D-75 and Job C-100? (Round your intermediate calculations to 2 decimal places.)

   

	Bid price
Job D-75	$
Job C-100	$

  

1-d.	What is Smithson’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)

   

Cost of goods sold

$

References

eBook & Resources

WorksheetLearning Objective: 02-01 Compute a predetermined overhead rate.Learning Objective: 02-03 Compute the total cost and average cost per unit of a job.

Difficulty: HardLearning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.

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9.

value:
3.00 points

Required information

Assume Smithson uses departmental overhead rates based on machine-hours.

  

2-a.	Compute the predetermined departmental overhead rates. (Round your answers to 2 decimal places.)

  

	Predetermined Overhead Rates
Molding Department	$
Fabrication Department	$

  

2-b.	Compute the total manufacturing costs assigned to Job D-75 and Job C-100. (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

   

	Total Manufacturing Cost
Job D-75	$
Job C-100	$

  

2-c.	If Smithson establishes bid prices that are 120% of total manufacturing costs, what bid price would it have established for Job D-75 and Job C-100? (Round your intermediate calculations to 2 decimal places, "Total manufacturing cost" and final answers to the nearest dollar amount.)

   

	Bid price
Job D-75	$
Job C-100	$

  

2-d.	What is Smithson’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places, "Total manufacturing cost" and final answers to the nearest dollar amount.)

   

Cost of goods sold

$

Answer 1