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:
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Molding
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Fabrication
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Total
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Machine-hours
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$20,000
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30,000
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50,000
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Fixed manufacturing overhead costs
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800,000
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$300,000
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$1,100,000
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Variable manufacturing overhead per machine-hour
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$5.00
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$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 job-Job D-75 and Job C-100. It provided the following information related to the two jobs:
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Job D-75:
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Molding
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Fabrication
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Total
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Direct materials cost
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$375,000
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$325,000
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$700,000
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Direct labor cost
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$200,000
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$160,000
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$360,000
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Machine-hours
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15,000
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5,000
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20,000
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Job C-100:
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Molding
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Fabrication
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Total
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Direct materials cost
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$300,000
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$250,000
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$550,000
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Direct labor cost
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$175,000
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$225,000
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$400,000
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Machine-hours
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5,000
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25,000
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30,000
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Smithson had no overapplied or underapplied manufacturing overhead during the year.