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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 | 25,000 | 35,000 | 60,000 | |||
| Fixed manufacturing overhead costs | $ | 710,000 | $ | 270,000 | $ 980,000 | |
| Variable manufacturing overhead per machine hour | $ | 5.00 | $ | 5.00 | ||
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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 100. It provided the following information related to those two jobs: |
| Job D 75: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 375,000 | $ | 324,000 | $ | 699,000 |
| Direct labor cost | $ | 220,000 | $ | 180,000 | $ | 400,000 |
| Machine hours | 18,000 | 7,000 | 25,000 | |||
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| Job C 100: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 210,000 | $ | 270,000 | $ | 480,000 |
| Direct labor cost | $ | 160,000 | $ | 260,000 | $ | 420,000 |
| Machine hours | 7,000 | 28,000 | 35,000 | |||
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Smithson had no overapplied or underapplied manufacturing overhead during the year.
Compute the total manufacturing costs assigned to Job D 75 and Job C 100.
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If Smithson establishes bid prices that are 120% of total manufacturing costs, what bid price would it have established for Job D 75 and Job C 100? What is Smithson’s cost of goods sold for the year? |