Question

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 Fabrication 26,000 36,000 $ 780,000 $200,000 $ 5.40 $ 5.40 Total 62,000 $980,000 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 $ 374,000 $ 322,000 $ 696,000 $ 220,000 $ 170,000 $390,000 17,000 9,000 26,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 210,000 $ 210,000 $420,000 $ 170,000 $ 290,000 $ 460,000 9,000 27,800 36,000 Delph had no underapplied or overapplied manufacturing overhead during the year.

Answer 1

1-a.
	Molding	Fabrication	Total
Estimated total machine hours used	26000	36000	62000
(*) Estimated variable manufacturing overhead per machine hour	5.40	5.40
Estimated total variable manufacturing overhead	140400	194400	334800
Estimated total fixed manufacturing overhead	780000	200000	980000
Estimated total manufacturing overhead	920400	394400	1314800

Plantwide predetermined overhead rate = Estimated total manufacturing overhead / Estimated total machine hours used = 1314800 / 62000

21.21

per MH

1-b.
	Job D-70	Job C-200
Total actual machine hours used	26000	36000
Plantwide predetermined overhead rate	21.21	21.21
Manufacturing overhead applied	551460	763560
	Job D-70	Job C-200
Direct materials	696000	420000
Direct labor cost	390000	460000
Manufacturing overhead applied	551460	763560
Total manufacturing cost	1637460	1643560

1-c.
	Job D-70	Job C-200
Total manufacturing cost	1637460	1643560
Bid price [ @ 140% of total manufacturing cost ]	2292444	2300984

1-d.
Cost of goods sold = Total manufacturing cost of the Jobs sold = 1637460 + 1643560	3281020