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 21, eee 33, eee 54, eee Fixed manufacturing overhead cost $740, eee $ 260, eee $1,eee, eee Variable manufacturing overhead cost per machine-hour 4.00 $ 1.50 $ 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-70 Molding Fabrication Total Direct materials cost $ 370,000 $ 320,000 $690,000 Direct labor cost $ 200,000 $ 160,000 $360,000 Machine-hours 15,000 6, eee 21,000 Job C-200 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 220,000 $ 260,000 $480,000 $ 160,000 $ 260,000 $420,000 6, eee 27,000 33,000 Delph had no underapplied or overapplied manufacturing overhead during the year.

Answer 1

Solution: Requirement1: Plant Wide Overhead rate Particulars Molding Department: Fabrication Department: Total Variable Overhead rate $ 4 $ Total machine hours 21000 33000 Total Variable Overhead $ 84,000 $ 49,500 $ Total Fixed Overheads $ 7,40,000 $ 2,60,000 $ Total manufacturing Overhead (Fixed + Variable) $ Total machine hours Plant Wide Overhead rate $ 54000 1,33,500 10,00,000 11,33,500 54000 20.99 Computation of Department OH rate Particulars Molding Department: Fixed manufacturing overhead cost $ 7,40,000 Machine hours 21000 Fixed manufacturing rate per hour $ 35 Variable manufacturing overhead rate $ 4 Pre determined overhead rate $ 39.24 Fabrication Department: $ 2,60,000 33000 $ 8 $ 2 $ 9.38 Requirement2: Cost Assigned to Job D - 70 and C - 200 Particulars D-70 Direct Material cost $ Direct Labor Cost $ Overheads: Molding $ Fabrication $ Total cost assigned $ C-200 6,90,000 $ 3,60,000 $ 4,80,000 4,20,000 5,88,571 $ 56,273 $ 16,94,844 $ 2,35,429 2,53,227 13,88,656 Requirement3: Computation of Bid Price: Particulars Total cost Bid Price (Cost 150% D-70 $ $ C-200 16,94,844 $ 25,42,266 $ 13,88,656 20,82,984 Requirement4: Cost of Goods sold = Cost of jobs $ 30,83,500 Kindly Comment down for any clarifications/ queries and please upvote.