Question

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 30,000 40,000 $ 770,000 $ 280,000 $ 5.90 $ 5.90 Total 70,000 $1,050,000 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 $ 379,000 $ 325,000 $ 704,000 $ 210,000 $ 140,000 $ 350,000 23,000 7,000 30,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 280,000 $ 290,000 $570,000 $ 170,000 $ 290,000 $ 460,000 7,000 33,000 40,000 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 140% of total manufacturing costs, 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 workings form part of the answer
• Requirement 2

Part A

Working		Molding Department:	Fabrication Department:
A	Total Fixed Overheads	$                        770,000	$                          280,000
B	Total machine hours	30,000	40,000
C = A/B	Fixed overhead rate	$                            25.67	$                                 7.00
D	Variable Overhead rate	$                               5.90	$                                 5.90
E = C+D	Predetermined Departmental Overhead rates	$                            31.57	$                              12.90

Part B

	Job D 70	Job C 200
Molding Department:
Direct material cost	$                        379,000	$                          280,000
Direct Labor cost	$                        210,000	$                          170,000
Manufacturing Overhead	$                        726,110	$                          220,990
Fabrication Department:
Direct material cost	$                        325,000	$                          290,000
Direct Labor cost	$                        140,000	$                          290,000
Manufacturing Overhead	$                          90,300	$                          425,700
Total manufacturing cost assigned	$                    1,870,410	$                      1,676,690

Part C

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$                    1,870,410	$                      1,676,690
B = A x 140%	Bid Price	$                    2,618,574	$                      2,347,366

Part D

Total manufacturing cost assigned
Job D 70	$                    1,870,410
Job C 200	$                    1,676,690
Cost of Goods Sold	$                    3,547,100