Question

JIM e ! THIS SHOWS What is correct or incorrect for the work you have completed so far. It does not indicate comg Required information [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 20,000 30,000 $ 700,000 $ 210,000 $ 3.00 $ 1.00 Total 50,000 $ 910,000 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 $325,000 $ 700,000 $ 200,000 $ 160,00 $ 360,000 14,000 6,000 20,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 300,000 $250,000 $ 550,000 $ 175,000 $225,000 $400,000 6,000 24,000 30,000 Delph had no underapplied or overapplied manufacturing overhead during the year. 2.Assume Delph uses departmental predetermined overhead rates based on machine-hours. a. Compute the departmental predetermined overhead rates. 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 costs, what bid prices would it have established for Job D-70 and

Answer 1

Solution a to d:

Computation of Departmental predetermined Overhead Rate
	Moding	Fabrication
Fixed Manufacturing Overhead costs	$7,00,000	$2,10,000
Variable Manufacturing Overhead cost [(20000*$3) and (30000*$1)]	$60,000	$30,000
Total Estimated Overhead costs (a)	$7,60,000	$2,40,000
/Total Estimated Machine Hours (b)	20000	30000
Plantwide Overhead Rate (a/b)	$38.00	$8.00
Computation of Total Manufacturing Costs
	Job D-70	Job C-200
Direct Material Costs	$7,00,000	$5,50,000
Direct Labor Costs	$3,60,000	$4,00,000
Manufacturing Overhead costs (14000*$38 + 6000*$8) and (6000*$38+ 24000*$8)	$5,80,000	$4,20,000
Total Manufacturing Costs	$16,40,000	$13,70,000
Computation of Bid Prices
	Job D-70	Job C-200
Total Manufacturing Costs	$16,40,000	$13,70,000
Bid price (Total Manufacturing Costs*150%)	$24,60,000	$20,55,000
Computation of Delph's Cost of Goods sold
Total Manufacturing Costs of Job D-70	$16,40,000
Total Manufacturing Costs of Job C-200	$13,70,000
Total Cost of Goods sold	$30,10,000