Question

(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 30,000 40,000 $ 770,000 $ 280,000 $ 5.90 $ 5.90 Total 70,000 $1,050,000 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 $ 325,000 $704,000 $ 210,000 $ 140,000 $ 350,000 23,000 7,000 30,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 280,000 $ 290,000 $570,000 $ 170,000 $ 290,000 $ 460,000 7,000 33,000 40,000 cost 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 bid prices that are 140% 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

Answers

• All working forms part of the answer
• Requirement 1

Part [a]

A	Variable Overhead rate	$                              5.90	$                             5.90
B	Total machine hours	30,000	40,000	70,000
C = A x B	Total Variable Overhead	$                       177,000	$                      236,000	$                413,000
D	Total Fixed Overheads	$                       770,000	$                      280,000	$            1,050,000
E = C+D	Total manufacturing Overhead			$            1,463,000
F	Total machine hours			70,000
G = E/F	Plant Wide Overhead rate			$                    20.90

Part [b]

	Job D 70	Job C 200
Molding Department:
Direct material cost	$                       379,000	$                      280,000
Direct Labor cost	$                       210,000	$                      170,000
Manufacturing Overhead	$                       480,700	$                      146,300
Fabrication Department:
Direct material cost	$                       325,000	$                      290,000
Direct Labor cost	$                       140,000	$                      290,000
Manufacturing Overhead	$                       146,300	$                      689,700
Total manufacturing cost assigned	$                   1,681,000	$                 1,866,000

Part [c]

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$                   1,681,000	$                  1,866,000
B = A x 140%	Bid Price	$                   2,353,400	$                  2,612,400

Part [d]

Total manufacturing cost assigned
Job D 70	$                   1,681,000
Job C 200	$                   1,866,000
Cost of Goods Sold	$                   3,547,000