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 20,882 $ 700, $ 3.00 Fabrication 38,890 $ 210,000 $ 1.ee Total 50,880 $910,000 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 $375,000 $325,800 $ 700, 880 $ 200,000 $ 160,000 $360,800 14,800 6,00 20,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 300,000 $250,000 $ 550,000 $ 175,000 $225,00 $ 400,000 6,00 24,00 30,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Required: 1. Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. C. If Delph establishes bid prices that are 150% of total manufacturing cost, 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) Plantwide predetermine overhead rate = (20000*3+30000*1+910000)/50000 = 20 per machine hour

b) Total manufacturing cost

	Job D-70	Job C-200
Direct material	700000	550000
Direct labor	360000	400000
Overhead Applied	400000	600000
Total manufacturing cost	1460000	1550000

c) Bid price

	Job D-70	Job C-200
Bid price	1460000*1.5 = 2190000	1550000*1.5 = 2325000

d) Cost of goods sold = 1460000+1550000 = 3010000