Smithson company plantwide and departmental overhead

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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