EXERCISE 4-15 Plantwide and Departmental Overhead Rates; Job Costs 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:

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:

Molding

Fabrication

Total

Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,000

30,000

50,000

Fixed manufacturing overhead costs . . . . . . . . . . . . . . . . .

$800,000

$300,000

$1,100,000

Variable manufacturing overhead per machine-hour . . . . .

$5.00

$5.00

Job D-75:

Molding

Fabrication

Total

Direct materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$375,000

$325,000

$700,000

Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$200,000

$160,000

$360,000

Machine-hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15,000

5,000

20,000

Job C-100:

Molding

Fabrication

Total

Direct materials cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$300,000

$250,000

$550,000

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

Required:

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

a. Compute the predetermined plantwide overhead rate.

b. Compute the total manufacturing costs assigned to Job D-75 and Job C-100.

c. If Smithson establishes bid prices that are 150% of total manufacturing costs, what bid

price would it have established for Job D-75 and Job C-100?

d. What is Smithson's cost of goods sold for the year?