Question

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: Molding Fabrication Total Machine-hours 23,000 33,000 56,000 240,000 Fixed manufacturing overhead costs $ 800,000 $ $ 1,040,000 Variable manufacturing overhead per machine-hour $ 5.30 $ 5.30 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 $ 379,000 $ 329,000 $ 708,000 $ 230,000 $ 170,000 $ 400,000 17,000 6,000 23,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 250,000 $ 290,000 $540,000 $ 160,000 $ 270,000 $430,000 6,000 27,000 33,000 Delph had no overapplied or underapplied manufacturing overhead during the year. value: 20.00 points Assume Delph uses a plantwide overhead rate based on machine-hours. Required: 1-a. Compute the predetermined plantwide overhead rate. (Round your ans 2 decimal places.) Predetermined overhead rate $ 23.87 per MH

Answer 1

Answers

• Requirement 1

[a]

		Molding Department:	Fabrication Department:
A	Variable Overhead rate	$                              5.30	$                             5.30
B	Total machine hours	23,000	33,000	56,000
C = A x B	Total Variable Overhead	$                       121,900	$                      174,900	$                296,800
D	Total Fixed Overheads	$                       800,000	$                      240,000	$            1,040,000
E = C+D	Total manufacturing Overhead			$            1,336,800
F	Total machine hours			56,000
G = E/F	Plant Wide Overhead rate			$                    23.87	Answer

[b]

	Job D 70	Job C 200
Molding Department:
Direct material cost	$                       379,000	$                      250,000
Direct Labor cost	$                       230,000	$                      160,000
Manufacturing Overhead	$                       405,790	$                      143,220
Fabrication Department:
Direct material cost	$                       329,000	$                      290,000
Direct Labor cost	$                       170,000	$                      270,000
Manufacturing Overhead	$                       143,220	$                      644,490
Total manufacturing cost assigned	$                   1,657,010	$                  1,757,710	ANSWERS

[c]

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$                   1,657,010	$                  1,757,710
B = A x 130%	Bid Price	$                   2,154,113	$                  2,285,023

[d]

Total manufacturing cost assigned
Job D 70	$                   1,657,010
Job C 200	$                   1,757,710
Cost of Goods Sold	$                   3,414,720

• Requirement 2

[a]

Working		Molding Department:	Fabrication Department:
A	Total Fixed Overheads	$                        800,000	$                          240,000
B	Total machine hours	23,000	33,000
C = A/B	Fixed overhead rate	$                            34.78	$                                 7.27
D	Variable Overhead rate	$                               5.30	$                                 5.30
E = C+D	Predetermined Departmental Overhead rates	$                            40.08	$                              12.57

[b]

	Job D 70	Job C 200
Molding Department:
Direct material cost	$                        379,000	$                          250,000
Direct Labor cost	$                        230,000	$                          160,000
Manufacturing Overhead	$                        681,360	$                          240,480
Fabrication Department:
Direct material cost	$                        329,000	$                          290,000
Direct Labor cost	$                        170,000	$                          270,000
Manufacturing Overhead	$                          75,420	$                          339,390
Total manufacturing cost assigned	$                    1,864,780	$                      1,549,870

[c]

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$                    1,864,780	$                      1,549,870
B = A x 130%	Bid Price	$                    2,424,214	$                      2,014,831

[d]

Total manufacturing cost assigned
Job D 70	$                    1,864,780
Job C 200	$                    1,549,870
Cost of Goods Sold	$                    3,414,650