Question

Required Informetlon 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 29,80e 798 , 8ee 5.18 39,800 229 , 8ee 5.10 68,808 $1,010,eee $ s 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 $380,8 324,8 704, 80e s 218,8 12,8 33e, 800 23,eee 6,880 29,800 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total 230,80 298,8 528, 800 148,80 23,8 37e, 80e 6,880 33,800 39,800 Delph had no underapplied or overapplied manufacturing overhead during the year. 2. Assume Delph uses departmental predetermined overhead rates based on machlne-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 bld prices that are 130% of total manufacturing costs, what bld 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

2 a) Calculation of Departmental predetermined overhead rates:- (Amount in $)

	Molding	Fabrication
Fixed Manufacturing Overhead Rates (A)	790,000	220,000
Machine Hours (B)	29,000	39,000
Departmental predetermined overhead rate per machine hour (A/B)	27.24138	5.64103

b) Calculation of Total Manufacturing Cost assigned to job D-70 and Job C-200:-

i)Job D-70:-   (Amount In $)

Job D-70	Molding	Fabrication	Total
Director Material Cost	380,000	324,000	704,000
Director Labor Cost	210,000	120,000	330,000
Variable Manufacturing Overhead (Machine Hours* variable overhead rate)	117,300 (23,000*5.10)	30,600 (6,000*5.10)	147,900
Fixed Manufacturing Overhead (Machine Hours* fixed overhead rate)	626,552 (23,000*27.24138)	33,846 (6,000*5.64103)	660,398
Total Manufacturing Cost	1,333,852	508,446	1,842,298

ii)Job C-200:- (Amount In $)

Job C-200	Molding	Fabrication	Total
Director Material Cost	230,000	290,000	520,000
Director Labor Cost	140,000	230,000	370,000
Variable Manufacturing Overhead (Machine Hours* variable overhead rate)	30,600 (6,000*5.10)	168,300 (33,000*5.10)	198,900
Fixed Manufacturing Overhead (Machine Hours* fixed overhead rate)	163,448 (6,000*27.24138)	186,154 (33,000*5.64103)	349,602
Total Manufacturing Cost	564,048	874,454	1,438,502

C) Calculation of Bid Price:- (Amount In $)

	Job D-70	Job C-200
Total Manufacturing Cost (A)	1,842,298	1,438,502
Bid Price(A*130%)	2,394,987	1,870,053

D)Calculation of Cost of Goods Sold:- (COGS) (Amount In $)

COGS= Opening Inventory + Total manufacturing cost - Closing Inventory

As there is no opening and closing Inventory,Cost of goods sold will be same as total manufacturing cost for both the jobs.

So COGS for Job D-70 is 1,842,298. And COGS for Job C-200 is 1,438,502.