Question

company provided the following estimates at the beginning of the year. beginn Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding 29,000 $ 719,999 $ 6.00 Fabrication 39,899 $ 249,999 $ 6.00 Total 68,888 $ 950,000 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 $ 377,000 $ 323,000 $ 700,000 $ 210,098 $ 180,000 $ 390,000 21,000 8,000 29,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 250,000 $ 230,000 $ 480,000 $ 170,000 $ 220,000 $390,000 8,000 31,000 39,000 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 150% of total manufacturing cost, what bid prices would it have established for Job 0.70 Job C-2007 d. What is Deloh's cost of goods sold for the vear?

Answer 1

(1a) Plantwide predetermined OH rate = (Fixed OH/Machine Hours) + Variable OH per machine hour

= ($950000/68000) + $6 = $19.97

(1b)

	Job D-70	Job C-200
Direct Material	$700000	$480000
Direct Labor	$390000	$390000
Manufacturing Overhead	(29000 * $19.97) =$579130	(39000 * $19.97) =$778830
Total Manufacturing cost	$1669130	$1648830

(1c)

	Bid Price
D-70 ($1669130 * 150%)	$2503695
C-200 ($1648830 * 150%)	$2473245

(1d)Cost of Goods Sold = Total manufacturing cost of D-70 & C-200

   $1669130 + $1648830 = $3317960