Question

Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding Fabric 29,000 39 $ 730,000 $ 240 $ 5.50 $ 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 $ 380,000 $ 321,000 $ 701,000 $ 250,000 $ 180,000 $ 430,000 21,000 8,000 29,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 250,000 $ 300,000 $ 550,000 $ 130,000 $ 220,000 $ 350,000 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 130% 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

1-a) Plantwide predetermined overhead rate= Estimated total manufacturing cost/Estimated total machine hours

= (29000*$5.50+39000*$5.50+$970000)/68000

= $19.76 per MH

b)

	Job D-70	Job C-200
Direct materials	$701000	$550000
Direct labor	430000	350000
Overhead applied	(29000*$19.76)= 573040	(39000*$19.76)=
Total manufacturing costs	$1704040	$1670640

c) Bid prices= 130% of Total manufacturing costs

Job D-70= $130%*1704040= $2215252

Job C-200= $130%*1670640= $2171832

d) Cost of goods sold= $1704040+1670640= $3374680

2-a) Predetermined overhead rate of Molding= Estimated total manufacturing cost/Estimated total machine hours

= (29000*$5.5+$730000)/29000= $30.67 per MH

Predetermined overhead rate of Fabrication= Estimated total manufacturing cost/Estimated total machine hours

= (39000*$5.50+$240000)/39000= $11.65 per MH

b) 245360

	Job D-70	Job C-200
Direct materials	$701000	$550000
Direct labor	430000	350000
Overhead applied	(21000*$30.67+8000*$11.65)= 737270	(8000*$30.67+31000*$11.65)= 606510
Total manufacturing costs	$1868270	$1506510

d) Bid prices= 130% of Total manufacturing costs

Job D-70= $130%*1868270= $2428751

Job C-200= $130%*1506510= $1958463

d) Cost of goods sold= $1868270+1506510= $3374780