Question

Required Information The following information applies to the questions displayed below.] Delph 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: Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding 25,000 $790.000 $ 5.50 Fabrication 35,000 $ 290,000 $ 5.50 Total 60,000 $1,000,000 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 $ 373, 000 $ 327,000 $700.000 $ 220,000 $140.000 $260.000 16,000 9.000 25.000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 270,000 $ 270,000 $540,000 $ 120,000 $ 240,000 $360,000 9,000 26.000 25.000 Delph had no underapplied or overapplied manufacturing overhead during the year. 2. Assume Delph uses departmental predetermined overhead rates based on machine-hours. a. Compute the departmental predetermined overhead rates. b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. c. If Delph establishes bid prices that are 120% of total manufacturing costs, what bld prices would It have established for Job D-70 and Job C-2002 d. What is Delph's cost of goods sold for the year?

Answer 1

1) Predetermine overhead rate:

Molding department = (790000/25000)+5.5 = 37.10 per MH

Fabrication department = (290000/35000)+5.5 = 13.79 per MH

2) Calculate manufacturing cost

	Job D-70	Job C-200
Direct material	700000	540000
Direct labor	360000	360000
Molding Overhead	593600	333900
Fabrication overhead	124110	358540
Total manufacturing cost	1777710	1592440

3) Bid price

Job D-70 = 1777710*1.2 = 2133252

Job C-200 = 1592440*1.2 = 1910928

4) Cost of goods sold = 1777710+1592440 = $3370150