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 Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding 23,000 $ 710,000 5.50 Fabrication 33,eee $ 270, eee $ 5.50 Total 56, eee $980, eee 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 $ 372,000 $ 210,000 16.000 Fabrication Total 5 324,eee 696,000 5 160,eee $ 370,000 7.ee 23,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 240,000 $260,000 $ see, eee $ 110,000 $250,000 $ 369, eee 7,000 26,000 33, eee Delph had no underapplied or overapplied manufacturing overhead during the year

Answer 1

Plantwide overhead uses single rate to allocate cost to jobs.

1.Total fixed cost/machine hour

=$980,000/56000 machine hour

=$17.5 per machine hour

Plant wide pre determined overhead rate Fixed overhead per machine hour + variableoverhead

=$17.5+$5.50

=$23 per machine hour

2.manufacturing cost assigned

	D-70	C-200
Direct Material Cost	$696,000	$500,000
Labor cost	$370,000	$360,000
Overhead cost allocated	$529,000($23*23,000)	$759,000($23*33,000)
Total Manufacturing cost	$1,595,000($696,000+$370,000+$529,000)	$1,619,000($500,000+$360,000+$759,000)

3.bid price

	D-70	C-200
Total manufacturing cost	$1,595,000	$1,619,000
bid price(130%)	$2,073,500 (1,595,000*130%)	$2,104,700 (1,619,000*130%)

4.Delph's cost of goods sold

=Total cost of goods sold

=manufacturing cost of D-70+manufacturing cost of C-200

=$1,595,000+$1,619,000

=$3,214,000