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 Fabrication 23,000 33,000 $ 800,000 $ 270,000 $ 6.00 $ 6.00 Total 56,000 $1,070,000 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 $ 376,000 $329,000 $ 210,000 $ 140,000 16,000 7,000 Total $ 705,000 $ 350,000 23,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 200,000 $ 280,000 $ 480,000 $ 180,000 $ 240,000 $ 420,000 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. 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-200? d. What is Delph's cost of goods sold for the year?

Answer 1

The answer is below-

(a) Departmental predetermined overhead rates
Particulars	Molding	Fabrication
Machine hours (A)	23000	33000
Fixed manufacturing overhead cost (B)	$               8,00,000.00	$               2,70,000.00
Fixed manufacturing overhead cost per machine hour (B/A)	$                            34.78	$                               8.18
Variable manufacturing overhead cost per machine hour	$                               6.00	$                               6.00
Total Overhead rate per machine hour	$                            40.78	$                            14.18
(b) Manufacturing Cost of Job D-70 and Job C-200
Job D-70
Particulars	Molding	Fabrication	Total
Direct Materials cost (A)	$               3,76,000.00	$               3,29,000.00	$               7,05,000.00
Direct Labor cost (B)	$               2,10,000.00	$               1,40,000.00	$               3,50,000.00
Machine hours	16000	7000	23000
Overhead Rate per machine hour	$                            40.78	$                            14.18	54.96
Overhead Cost i.e Machine hours x Overhead Rate per machine hour(C)	$               6,52,521.74	$                   99,272.73	$               7,51,794.47
Total Manufacturing Cost (A+B+C)	$            12,38,521.74	$               5,68,272.73	$            18,06,794.47
Job C-200
Particulars	Molding	Fabrication	Total
Direct Materials cost (A)	$               2,00,000.00	$               2,80,000.00	$               4,80,000.00
Direct Labor cost (B)	$               1,80,000.00	$               2,40,000.00	$               4,20,000.00
Machine hours	7000	26000	33000
Overhead Rate per machine hour	$                            40.78	$                            14.18	54.96
Overhead Cost i.e Machine hours x Overhead Rate per machine hour(C)	$               2,85,478.26	$               3,68,727.27	$               6,54,205.53
Total Manufacturing Cost (A+B+C)	$               6,65,478.26	$               8,88,727.27	$            15,54,205.53
(c) Bid prices for Job D-70 and Job C-200
Particulars	D-70	C-200
Total Manufacturing Cost	$            18,06,794.47	$            15,54,205.53
Bid Prices @ 120%	$            21,68,153.36	$            18,65,046.64
(d) Cost of Goods Sold
Particulars	Amount
Manufacturing Cost of D-70	$            18,06,794.47
Manufacturing Cost of C-200	$            15,54,205.53
Cost of Goods sold	$            33,61,000.00