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: Molding Fabrication Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Total 60.000 $1,000,000 $ 790,000 $ 5.50 $290,000 $ 5.50 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 Fabricacion Total $373.000 $ 227.000 $ 700.000 $ 220.000 $140.000 $260.000 16.000 9.000 25,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 270,000 $ 270,000 $540.000 $ 120.000 $ 240,000 $360,000 9,000 26,000 35,000 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 bld 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?

Answer 1

1a) Predetermine overhead rate = (1080000/60000+5.5) = 23.50 per MH

1b) Calculate manufacturing cost

	Job D-70	Job C-200
Direct material	700000	540000
Direct labor	360000	360000
Overhead applied	25000*23.50 = 587500	822500
Total manufacturing cost	1647500	1722500

1c) Bid price

Job D-70 = 1647500*1.20 = 1977000

Job C-200 = 1722500*1.20 = 2067000

1d) Cost of goods sold = 1647500+1722500 = $3370000