2024 – Exercise 3 18 Plantwide and Departmental Overhead Rates Job Costs L01 L02 L03 Smithson Company uses a job order costing

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.