Question

Delph Company uses a job-order costing system and has two manufacturing departments-Molding and Fabricat he company provided the following estimates at the beginning of the ye. Molding Fabrication Total 26,880 3 6, eee 62,080 $740,$ 240,000 $980,eee Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour $ 5.50 $ 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-7e: Molding Fabrication Total Direct materials $380,000 $323,892 3783,880 cost Direct labor $ 220,088 $ 170,000 $390,860 cost Machine 21, eee 5,080 26,888 hours Job C- Molding Fabrication Total dB: Direct materials $ 230,000 $248,688 $470.000 COSE Direct labor $150,eee $ 270,888 5420.882 COSE Machine 5.ee 31.082 36.686 De on had no inceared or overapple manufacturing overhead during the

Answer 1

Answer a.

Molding Department:

Estimated manufacturing overhead = Estimated variable manufacturing overhead per machine hour * Estimated machine hours + Estimated fixed manufacturing overhead
Estimated manufacturing overhead = $5.50 * 26,000 + $740,000
Estimated manufacturing overhead = $883,000

Fabricating Department:

Estimated manufacturing overhead = Estimated variable manufacturing overhead per machine hour * Estimated machine hours + Estimated fixed manufacturing overhead
Estimated manufacturing overhead = $5.50 * 36,000 + $240,000
Estimated manufacturing overhead = $483,000

Total estimated manufacturing overhead = $883,000 + $483,000
Total estimated manufacturing overhead = $1,321,000

Predetermined overhead rate = Total estimated manufacturing overhead / Total estimated machine hours
Predetermined overhead rate = $1,321,000 / 62,000
Predetermined overhead rate = $21.31

Answer b.

Job D-70:

Manufacturing overhead applied = Predetermined overhead rate * Actual machine hours
Manufacturing overhead applied = $21.31 * 26,000
Manufacturing overhead applied = $554,060

Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead applied
Total manufacturing cost = $703,000 + $390,000 + $554,060
Total manufacturing cost = $1,647,060

Job C-200:

Manufacturing overhead applied = Predetermined overhead rate * Actual machine hours
Manufacturing overhead applied = $21.31 * 36,000
Manufacturing overhead applied = $767,160

Total manufacturing cost = Direct materials + Direct labor + Manufacturing overhead applied
Total manufacturing cost = $470,000 + $420,000 + $767,160
Total manufacturing cost = $1,657,160

Answer c.

Job D-70:

Bid price = Manufacturing cost + Markup
Bid price = $1,647,060 + 140% * $1,647,060
Bid price = $3,952,944

Job C-200:

Bid price = Manufacturing cost + Markup
Bid price = $1,657,160 + 140% * $1,657,160
Bid price = $3,977,184

Answer d.

Cost of goods sold = Manufacturing cost for Job D-70 + Manufacturing cost for Job C-200
Cost of goods sold = $1,647,060 + $1,657,160
Cost of goods sold = $3,304,220