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 21,000 $ 740,000 $ 4.00 Fabrication 34,000 $ 280,000 $ 2.00 Total 55,000 $1,020,000 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 $ 370,000 $ 320,000 $ 690,000 $ 240,000 $ 140,000 $ 380,000 17,000 4,000 21,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 220,000 $ 200,000 $ 420,000 $ 100,000 $ 280,000 $ 380,000 4,000 30,000 34,000 Delph had no underapplied or overapplied manufacturing overhead during the year.

Answer 1

Answers

• All working forms part of the answer
• [2a]

Working		Molding Department:	Fabrication Department:
A	Total Fixed Overheads	$                        740,000	$                          280,000
B	Total machine hours	21,000	34,000
C = A/B	Fixed overhead rate	$                            35.24	$                                 8.24
D	Variable Overhead rate	$                               4.00	$                                 2.00
E = C+D	Predetermined Departmental Overhead rates	$                            39.24	$                              10.24

• [2b]

	Job D 70	Job C 200
Molding Department:
Direct material cost	$                        370,000	$                         220,000
Direct Labor cost	$                        240,000	$                          100,000
Manufacturing Overhead	$                        667,080	$                          156,960
Fabrication Department:
Direct material cost	$                        320,000	$                          200,000
Direct Labor cost	$                        140,000	$                          280,000
Manufacturing Overhead	$                          40,960	$                          307,200
Total manufacturing cost assigned	$                    1,778,040	$                      1,264,160

• [2c]

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$                    1,778,040	$                      1,264,160
B = A x 150%	Bid Price	$                    2,667,060	$                      1,896,240

• [2d]

Total manufacturing cost assigned
Job D 70	$                    1,778,040
Job C 200	$                    1,264,160
Cost of Goods Sold	$                    3,042,200