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 | Fabrication | Total | |||||
Machine-hours | 34,000 | 44,000 | 78,000 | ||||
Fixed manufacturing overhead costs | $ | 760,000 | $ | 230,000 | $ | 990,000 | |
Variable manufacturing overhead cost per machine-hour | $ | 6.10 | $ | 6.10 | |||
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: | Molding | Fabrication | Total | |||
Direct materials cost | $ | 375,000 | $ | 327,000 | $ | 702,000 |
Direct labor cost | $ | 220,000 | $ | 170,000 | $ | 390,000 |
Machine-hours | 24,000 | 10,000 | 34,000 | |||
Job C-200: | Molding | Fabrication | Total | |||
Direct materials cost | $ | 270,000 | $ | 250,000 | $ | 520,000 |
Direct labor cost | $ | 170,000 | $ | 260,000 | $ | 430,000 |
Machine-hours | 10,000 | 34,000 | 44,000 | |||
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 120% 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?
1A
Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.)
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Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)
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Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. If Delph establishes bid prices that are 120% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200? (Round your intermediate calculations to 2 decimal places.)
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Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. What is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)
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1a) Plantwide predetermine overhead rate = (78000*6.1+990000)/78000 = 18.79 per hour
1b) Calculate total manufacturing cost
Job D-70 | Job C-200 | |
Direct material | 702000 | 520000 |
Direct labor | 390000 | 430000 |
Overhead | 34000*18.79 = 638860 | 44000*18.79 = 826760 |
Total manufacturing cost | 1730860 | 1776760 |
1c) Bid price
Job D-70 = 1730860*1.20 = 2077032
Job C-200 = 1776760*1.20 = 2132112
1d) Cost of goods sold = 1730860+1776760 = 3507620
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company...
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