Question

CH Upton and Verlander Company uses a job-order costing system. Upton and Verlander has two manufacturing departments-Molding and Fabrication. Upton and Verlander 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 $ 800,000 $ 290,000 $1,090,000 Variable manufacturing overhead cost per machine-hour $5.60 $ 5.60 During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs-Job D-70 and Job C-200. It provided the following information related to those two jobs: Job D-70: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 374, 000 $ 326,000 $ 700,000 $ 240,000 $ 150,000 $ 390,000 20,000 5,000 25,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 270,000 $ 210,000 $ 480,000 $ 180,000 $ 270,000 $450,000 5,000 30,000 35,000 Upton and Verlander had no underapplied or overapplied manufacturing overhead during the year.

Answer 1

1a
Estimated Variable manufacturing overhead	336000	=(25000*5.60)+(35000*5.60)
Estimated Fixed manufacturing overhead	1090000
Total Estimated manufacturing overhead	1426000
Divide by Estimated Machine hours	60000
Predetermined overhead rate	23.77	per MH
1b
	Job D-70	Job C-200
Direct materials cost	700000	480000
Direct labor cost	390000	450000
Overhead applied	594250	831950
Total manufacturing cost	1684250	1761950
1c
	Job D-70	Job C-200
Total manufacturing cost	1684250	1761950
Add: Markup @20%	336850	352390
Bid prices	2021100	2114340
1d
Total manufacturing cost Job D-70	1684250
Total manufacturing cost Job C-200	1761950
Cost of goods sold	3446200
Workings:
Overhead applied:
Job D-70	594250	=25000*23.77
Job C-200	831950	=35000*23.77