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		Fabrication			Total
Machine-hours		25,000		35,000		60,000
Fixed manufacturing overhead costs	$	770,000	$	240,000	$	1,010,000
Variable manufacturing overhead cost per machine-hour	$	5.70	$	5.70

  

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	$	329,000	$	704,000
Direct labor cost	$	200,000	$	170,000	$	370,000
Machine-hours		17,000		8,000		25,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	210,000	$	250,000	$	460,000
Direct labor cost	$	170,000	$	230,000	$	400,000
Machine-hours		8,000		27,000		35,000

Delph had no underapplied or overapplied manufacturing overhead during the year.

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.)

	Predetermined overhead rate per MH

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.)

	Total Manufacturing Cost Job D-70 Job C-200

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. If Delph establishes bid prices that are 130% 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.)

	Bid price Job D-70 Job C-200

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.)

	Cost of goods sold

Answer 1

Solution  a:

Plantwide predetermined overhead rate = Estimated overhead / Estimated machine hours = [(25000*$5.70) + (35000*$5.70) + $1,010,000] / 60000

= $22.53 per machine hour

Solution b:

Compuatation of manufacturing cost assigned to Job - Delph
Particulars	Job D70	Job C200
Direct Material	$704,000.00	$460,000.00
Direct Labor	$370,000.00	$400,000.00
Manufacturing overhead D 70 - 25000*$22.53 C200 - 35000*$22.53	$563,250.00	$788,550.00
Total Manufacturing cost	$1,637,250.00	$1,648,550.00

Solution c:

Compuatation of Bid Price
Particulars	Job D70	Job C200
Manufacturing Cost	$1,637,250.00	$1,648,550.00
Markup (30%)	$491,175.00	$494,565.00
Bid Price of Job	$2,128,425.00	$2,143,115.00

Solution d:

Cost of goods sold for the year = $1,637,250 + $1,648,550 = $3,285,800