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: Molding 20,000 $ 700, 000 Fabrication Total 50, e00 $ 910, e00 Machine-hours 30, 000 $ 210,000 Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour 3.00 1.00 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: Molding Fabrication $ 375,000 $ 325,000 $ 700, e00 $ 200, 000 $ 160, 000 $ 360, 000 6, 000 Job D-70: Total Direct materials cost Direct labor cost Machine-hours 20, 000 14,000 Job C-200: Molding $ 300, e00 $ 250, 000 $ 550, 000 $ 175, 000 $ 225, 000 $ 400, e00 6,e00 Fabrication Total Direct materials cost Direct labor cost Machine-hours 24,e00 30, eee 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-70o and Job C-200 c. If Delph establishes bid prices that are 150% of total manufacturing costs, what bid prices would It have established for Job D-70 and Job C-200? d. What Is Delph's cost of goods sold for the year?

Answer 1

a) Departmental predetermine overhead rate :

Molding = 700000/20000+3 = 38 per machine hour

Fabrication = 210000/30000+1 = 8 per machine hour

b) Total manufacturing cost

	Job D-70	Job C-200
Direct material	700000	550000
Direct labor	360000	400000
Molding overhead	14000*38 = 532000	228000
Fabrication overhead	6000*8 = 48000	192000
Total manufacturing cost	1640000	1370000

c) Bid price

	Job D-70	Job C-200
Bid price	1640000*1.5 = 2460000	2055000

d) Cost of goods sold = 1640000+1370000 = 3010000