Chapter 4-3

Smithson Company uses a job-order costing system and has two manufacturing departmentsMolding 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	$	720,000	$	220,000	$	940,000
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 jobsJob 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	$	322,000	$	698,000
Direct labor cost	$	210,000	$	160,000	$	370,000
Machine-hours		17,000		7,000		24,000

Job C-100:	Molding		Fabrication		Total
Direct materials cost	$	280,000	$	270,000	$	550,000
Direct labor cost	$	150,000	$	300,000	$	450,000
Machine-hours		7,000		27,000		34,000

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

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

Required:

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 costJob D-75Job 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 priceJob D-75Job C-100

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

Cost of goods sold