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 28,000 38,000 $ 790,000 $ 270,000 $ 6.00 $ 6.00 Total 66,000 $1,060,000 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 $ 375,000 $ 322,000 $ 697,000 $ 210,000 $ 130,000 $ 340,000 20,000 8,000 28,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 280,000 $ 260,000 $ 540,000 $ 140,000 $ 240,000 $ 380,000 8,000 30,000 38,000 Delph had no underapplied or overapplied manufacturing overhead during the year.

Answer 1

2a) Overhead rate :

Molding department = (790000/28000+6) = 34.21 per MH

Fabrication department = (270000/38000+6) = 13.11 per MH

2b) Total manufacturing cost

	Job D-70	Job C-200
Direct material	697000	540000
Direct labor	340000	380000
Molding overhead	684200	273680
Fabrication overhead	104880	393300
Total	1826080	1586980

2c) Bid price

Job D-70 = 1826080*1.5 = 2739120

Job C-200 = 1586980*1.5 = 2380470

2d) Cost of goods sold = 1826080+1586980 = 3413060