Question

Ch. 2: Homework i Saved Help Save & Exit Submit Check my work 5 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: Part 2 of 2 Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding 30,000 $ 790,000 $ 5.20 Fabrication 40,000 $ 200,000 $ 5.20 Total 70,000 $ 990,000 4 points 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: eBook Print Job D-70: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 374,000 $ 327,000 $701,000 $ 220,000 $ 130,000 $ 350,000 22,000 8,000 30,000 References Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 280,000 $ 280,000 $ 560,000 $ 150,000 $ 260,000 $ 410,000 8,000 32,000 40,000 Delph had no underapplied or overapplied manufacturing overhead during the year.

Answer 1

2

a)

The firt step to calculate the estimated total overhead costs in Molding and Fabrication

Molding: Using the equation Y=a+bX , the estimated total manufacturing overhead cost would be calculated as follows:

Y = $ 790000 + ( $ 5.20 x 30000 Hours )

Estimated fixed manufacturing overhead =$ 790,000
Estimated variable manufacturing overhead = $5.20 per MH × 30,000 MHs = $ 156000
Estimated total manufacturing overhead cost = $ 946000

Fabrication: Using the equation Y = a + bX, the estimated total manufacturing overhead cost would be calculated as follows:

Y = $200,000 + ($5.2per MH)(40,000 MHs)

Estimated fixed manufacturing overhead = $ 200,000
Estimated variable manufacturing overhead: $5.2 per MH × 40000 MHs = $ 208000
Estimated total manufacturing overhead cost = $ 408000

The second step is to combine the estimated manufacturing overhead costs in Molding and Fabrication ($ 946000 + $ 408000 = $ 1354000) to enable calculating the predetermined overhead rate as follows:

Estimated total manufacturing overhead (a) $ 1354000
Estimated total machine-hours (b) 70000 Hours
Predetermined overhead rate (a) ÷ (b) $ 19.34 per MH

b) Total manufacturing cost assigned to Jobs D-70 and C-200:

Particulars	D - 70 ($)	C - 200 ($)
Direct Materials	701000	560000
Direct Labour	350000	410000
Manufacturing Overhead applied	580200 ( $ 19.34 x 30000 hours)	773600 ( $ 19.34 x 40000 hours)
Total Manufacturing Cost	1631200	1743600

c) Bid prices for Jobs D-70 and C-200:

Particulars	D - 70 ($)	C - 200 ($)
Total Manufacturing Cost (a)	1631200	1743600
Markup Percentage (b)	130%	130%
Bid Price (axb)	2120560	2266680

d) Because the company has no beginning or ending inventories and only Jobs D-70 and C-200 were started, completed, and sold during the year, the cost of goods sold is equal to the sum of the manufacturing costs assigned to both jobs of $ 3374800 ( $ 1631200 + $ 1743600 )