Question

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 jobs—Job D-75 and Job C-l00. It provided the following information related to those two jobs:

.:.

.:.
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-l00?
d. What is Smithson’s cost of goods sold for the year?
2. Assume Smithson uses departmental overhead rates based on machine-hours.
a. Compute the predetermined departmental overhead rates.
b. Compute the total manufacturing costs assigned to Job D-75 and Job C-I 00.
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?
3. What managerial insights are revealed by the computations that you performed in this problem?



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  • CreatedSeptember 27, 2013
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