Question

Help Sav Required information The following information applies to the questions displayed below) Upton and Verlander Company uses a job-order costing system. Upton and Verlander has two manufacturing departments-Molding and Fabrication. Upton and Verlander 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 28,000 38,000 $ 780,000 $ 230,000 $ 5.20 $ 5.20 Total 66,000 $1,010,000 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-701 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 371,000 $325,000 $ 696,000 $ 210,000 $ 160,000 $ 370,000 21,000 7,000 28,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 240,000 $ 200,000 $ 440,000 $ 150,000 $ 280,000 $430,000 7,000 31,000 38,000 Upton and Verlander had no underapplied or overapplied manufacturing overhead during the year. 2. Assume Upton and Verlander 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 Upton and Verlander 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 Upton and Verlander's cost of goods sold for the year?

Answer 1

2a
	Predetermined overhead rate
Molding Department	33.06	=5.20+(780000/28000)
Fabrication Department	11.25	=5.20+(230000/38000)
b
	Job D-70	Job C-200
Direct materials cost	696000	440000
Direct labor cost	370000	430000
Overhead:
Molding Department	694260	231420
Fabrication Department	78750	348750
Total manufacturing cost	1839010	1450170
c
	Job D-70	Job C-200
Total manufacturing cost	1839010	1450170
Add: Markup @40%	735604	580068
Bid prices	2574614	2030238
d
Total manufacturing cost Job D-70	1839010
Total manufacturing cost Job C-200	1450170
Cost of goods sold	3289180

Workings:
Overhead applied:
	Job D-70	Job C-200
Molding Department	=21000*33.06	=7000*33.06
Fabrication Department	=7000*11.25	=31000*11.25