Question

Required Information The following information applies to the questions displayed below.) 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 Pixed manufacturing overhead coats Variable manufacturing overhead coat per machine-hour Molding Fabrication 23,000 33,000 $750,000 $ 220,000 $ 5.70 $ 5.70 afacturing the lead stort per machine-hour Total 56,000 $970,000 750,000 $220,000 -25,000 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 Tabrication Total $377,000 $324.000$ 701.000 $ 210,000 $180,000 $390,000 15,000 8,000 23,000 Job C-2003 Direct materials cost Direct labor cost Machine-hours Molding Tabrication Total $240.000 200.000 440,000 $ 120,000 $ 270,000 $390,000 8.000 25.000 33,000 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-70 and Job C 200. c. If Delph establishes bid prices that are 120% of total manufacturing costs, what bid prices would it have established for Job D-70 and Job C-2007 d. What is Delph's cost of goods sold for the vear?

Answer 1

Solution 2 a. Computation of Departmental predetermined Overheads rates Molding Fabrication Fixed Manufacturing Overheads (a) $ 7,50,000 $ 2,20,000 Machine-hours (b) 23000 33000 Fixed Overheads per hour (a/b) $ 32.61 $ 6.67 Add: Variable overhead per hour $ 5.70 $ 5.70 Departmental Overheads rates $ 38.31 $ 12.37 Solution 2 b. Computation of Total manufacturing cost of Job D-70 and Job C-200 Job D-70 Molding Fabrication Total Direct Material Cost $ 3,77,000.00 $3,24,000.00 $ 7,01,000.00 Direct Labour Cost $ 2,10,000.00 $1,80,000.00 $ 3,90,000.00 Overheads Molding (15,000 x $38.31) $ 5,74,630.43 $ 5,74,630.43 Fabrication (8,000 x $12.37) $ 98,933.33 $ 98,933.33 $ 11,61,630.43 $6,02,933.33 $ 17,64,563.77 Therefore, Total cost of Job D-70 is $ 17,64,564 Fabrication $3,24,000.00 $1,80,000.00 Job C-200 | Molding Direct Material Cost $ 3,77,000.00 Direct Labour Cost $ 2,10,000.00 Overheads Molding (8,000 x $38.31) $ 3,06,469.57 Fabrication (25,000 x $12.37) $ 8,93,469.57 Therefore, Total cost of Job C-200 is $ 17,06,636 Total $ 7,01,000.00 $ 3,90,000.00 $ 3,06,469.57 $ 3,09,166.67 $17,06,636.23 $3,09,166.67 $8,13,166.67 Solution 2 c. Compuation of Bid Prices Job D-70 $ 17,64,564 x 120% = Job C-200 $ 17,06,636 x 120% = $ $ 21,17,477 20,47,963 Solution 2 d. Delph's cost of Goods sold for the year = ($1,764,564 + $1,706,636) = $ 34,71,200

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