Exercise 3-18 Plantwide and Departmental Overhead Rates; Job Costs [L01, L02, L03]
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 |
$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 |
|
|
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two job—Job D-75 and Job C-100. It provided the following information related to the two jobs:
|
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 |
|
Direct labor cost |
$175,000 |
|
$225,000 |
|
$400,000 |
|
Machine-hours |
5,000 |
|
25,000 |
|
30,000 |
Smithson had no overapplied or underapplied manufacturing overhead during the year.
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