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: Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding Fabrication 23,000 33,000 $ 750,000 $250,000 $ 5.90 $ 5.90 Total 56,000 $1,000,000 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 Fabrication total $ 379,000 $ 328,000 $ 707,000 $ 210,000 $140,000 $ 350,000 16,000 7,000 23,000 Job C-2001 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 250,000 $ 220,000 $ 470,000 $ 150,000 $ 290,000 $ 440,000 7.000 26,000 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. Comte the denartimental predetermined overhead ratae

Answer 1

2)

a)

	Molding	Fabrication
Total variable overhead	23000*5.9=135700	33000*5.9=194700
Total fixed cost	750000	250000
Total overhead cost	885700	444700
Machine hours	23000	33000
Departmental overhead cost per MH	885700/23000 =$ 38.51	444700/33000=$ 13.48

B)

	Job D--70	C-200
Direct material	707000	470000
Direct labor	350000	440000
Overhead applied
Molding	16000*38.51= 616160	7000*38.51= 269570
Fabrication	7000*13.48= 94360	26000*13.48= 350480
Total manufacturing cost	1767520	1530050

c)

	Job D--70	C-200
Total manufacturing cost	1767520	1530050
Bid price	1767520*120%= 2121024	1530050*120%= 1836060

d)Cost of goods sold:

	Job D--70	C-200	Total
Total cost of goods sold	1767520	1530050	3297570