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: Molding Fabrication Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour 7e,88e $730,00θ $ 300,000 $1,030,000 3e,00e 40,000 $5.605.60 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 FabricationTotal 뛰 376,000 $ 325,000 701,000 $ 210,000 140,000 $ 350,000 22,800 8,000 30,000 Job C-280: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $300,000 220,000 $ 520,000 $ 140,000 $ 280,000 第 420,000 8,000 32,000 40,900 Delph had no underapplied or overapplied manufacturing overhead during the year Exercise 2-15 Part 1 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 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

Answers

• All working forms part of the answer
• Requirement 1

--Part ‘a’

Working		Molding Department:	Fabrication Department:	Total
A	Variable Overhead rate	$                 5.60	$                5.60
B	Total machine hours	30,000	40,000	70,000
C = A x B	Total Variable Overhead	$          168,000	$         224,000	$             392,000
D	Total Fixed Overheads	$          730,000	$         300,000	$          1,030,000
E = C+D	Total manufacturing Overhead			$          1,422,000
F	Total machine hours			70,000
G = E/F	Plant Wide Overhead rate			$                  20.31

--Part ‘b’

	Job D 70	Job C 200
Molding Department:
Direct material cost	$          376,000	$         300,000
Direct Labor cost	$          210,000	$         140,000
Manufacturing Overhead [Machine hours x $20.31]	$         446,820	$         162,480
Fabrication Department:
Direct material cost	$          325,000	$         220,000
Direct Labor cost	$          140,000	$         280,000
Manufacturing Overhead [Machine hours x $20.31]	$          162,480	$         649,920
Total manufacturing cost assigned	$      1,660,300	$     1,752,400

--Part ‘c’

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$          1,660,300	$     1,752,400
B = A x 120%	Bid Price	$          1,992,360	$     2,102,880

--Part ‘d’

Cost of Goods Sold = Cost of Job D70 and Job C200 = 1660300 + 1752400
= $ 3,412,700 = Answer