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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
$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
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:
Direct materials cost
$375,000
$325,000
$700,000
Direct labor cost
$200,000
$160,000
$360,000
15,000
5,000
20,000
Job C-100:
$250,000
$550,000
$175,000
$225,000
$400,000
25,000
Smithson had no overapplied or underapplied manufacturing overhead during the year.
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