Problem
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
|
|
27,000
|
|
37,000
|
64,000
|
|
Fixed manufacturing overhead costs
|
$
|
720,000
|
$
|
210,000
|
$ 930,000
|
|
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
|
$
|
376,000
|
$
|
323,000
|
$
|
699,000
|
|
Direct labor cost
|
$
|
250,000
|
$
|
180,000
|
$
|
430,000
|
|
Machine-hours
|
|
22,000
|
|
5,000
|
|
27,000
|
|
Job C-100:
|
Molding
|
Fabrication
|
Total
|
|
Direct materials cost
|
$
|
210,000
|
$
|
230,000
|
$
|
440,000
|
|
Direct labor cost
|
$
|
120,000
|
$
|
240,000
|
$
|
360,000
|
|
Machine-hours
|
|
5,000
|
|
32,000
|
|
37,000
|
Smithson had no overapplied or underapplied manufacturing overhead during the year.
1. Compute the predetermined plantwide overhead rate.
2. Compute the total manufacturing costs assigned to Job D-75 and Job C-100.
3. 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?
4. What is Smithson's cost of goods sold for the year?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.