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: Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding Fabrication Total 23,000 32,000 55,000 $ 720,000 $ 220,000 $ 940,000 S 4.00 $ 1.00 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 $ 370,000 $ 320,000 $ 690,000 $ 220,000 $ 160,000 $ 380,000 13,000 10,000 23,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 200,000 $ 280,000 $ 480,000 $ 140,000 $ 260,000 $400,000 10,000 22,000 32,000 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 150% 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

1a
Estimated Variable manufacturing overhead	124000	=(23000*4)+(32000*1)
Estimated Fixed manufacturing overhead	940000
Total Estimated manufacturing overhead	1064000
Divide by Estimated Machine hours	55000
Predetermined overhead rate	19.35	per MH
1b
	Job D-70	Job C-200
Direct materials cost	690000	480000
Direct labor cost	380000	400000
Overhead applied	445050	619200
Total manufacturing cost	1515050	1499200
1c
	Job D-70	Job C-200
Total manufacturing cost	1515050	1499200
Add: Markup @50%	757525	749600
Bid prices	2272575	2248800
1d
Total manufacturing cost Job D-70	1515050
Total manufacturing cost Job C-200	1499200
Cost of goods sold	3014250
Workings:
Overhead applied:
Job D-70	445050	=23000*19.35
Job C-200	619200	=32000*19.35