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 24,000 $ 740,000 S 4.00 Fabrication 32,800 $ 280,000 $ 1.00 Total 56,888 $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: Molding Fabrication Total Direct materials cost $ 370,000 $ 320,000 $ 690,000 Direct labor cost $ 220,000 $140,000 $ 360,000 Machine-hours 17,000 7,000 24,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 260,000 $220,000 $ 480,000 $ 140,000 $280,000 $420,000 7,000 25,000 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-2007 d. What is Delph's cost of goods sold for the year?

Answer 1

I la) Plant Wide Predetermined overhead Rate $20.50 machine hour Note Total molding Fabrication Department Debautment $4 Variable Overhead Rate 24000 32000 56000 (6) Total Machine Hours Total variable oven head $96000 $32000 $128000 (©= (a) x(6) $740000 $ 280000 $ 1020000 To till fixed overhead lld) Hd) $ 836 000 $312000 $ 1148000 To teel Manufacturing overhead Total Manuf anufacturing overhead = $ 1148000 Total Machine hour a 56000 hours. Plant wide Predeteu mined Totul Manufacturing overhead Overhead late To tell Machine Hour $1148000 $7 000 $ 20.50

th Total manufacturing Cost assigned to Job D-70 and Job C-200. Job C-200 Job D-70 $ Reso $ 370000 $260000 Molding Department : Direct material Cost Direct labor lost $ 220000 $140000 Manufacturing over head $143500 (17000 x 20.5; 7000x20.5) $348500 $2200 00 Fabrication Depautment : Direct material Cost $320 000 Direct labor cost $ 1400 00 Overhead (7000 x 20.5; 25000X20.5) $143500 Total manufacturing cost assigned $1542000 $280 0 0 0 Manufacturing $ 512 500 $ 1556000 Total Manufacturing cost assigned to Job D-70 $1542000 Job c-200 $ 1556000 (c) $ 2313000 Bid price for Job D-70 Bid price for Job C-200 $ 2334000 Note $1542000X150 To teel Manufacturing Cost of Job D-70 = $1842.000 su Bid Price = 150% of total. I manufacturing lost To tal manufacturing cost of Job C-200 = $ 1556000 Bid price - 150% of 1556000 1504. X $1856000 - $223 34000 $ 2313000

(d) Delph's cost of goods sold for the year is + $ 3098000 Note : Cost of Goods sold = total marufa eturing cost of Job D-70 + Do tad manufacturing lost of Job (-200 - $1542000 + $1556000 $ 309 8000.