Question

Required information [The following information applies to the questions displayed below.) 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 56,000 Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour 23,000 $ 780,000 33,000 290,000 $1,070,000 $ 5.80 5.80 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 Molding Fabrication Total Job D-70: Direct materials cost $370,000 $ 330,000 Direct labor cost Machine-hours 700,000 360,000 23,000 $220,000 $ 140,000 8,000 15,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total 240,000 220,000 460,000 $ 140,000 $ 290, 000 430,000 33,000 8,000 25,000 Delph had no underapplied or overapplied manufacturing overhead during the year.

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 130% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?

d. What is Delph’s cost of goods sold for the year?

2. Assume Delph 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 Delph establishes bid prices that are 130% of total manufacturing costs, what bid prices would it have established for Job D-70 and Job C-200?

d. What is Delph’s cost of goods sold for the year?

Answer 1

	1a)	predetermined overhead rate
		variable overhead rate					5.8
		fixed manufacturing overhead			(1,070,000/56000)=		19.11
		predetermined overhead rate					24.91
	1b)	total manufacturing cost assinged
		D-70
		Direct materials cost					700,000
		direct labor cost					360,000
		overhead assigned					572864
		total manufacturing cost					1,632,864
		job c-200
		Direct materials cost					460,000
		direct labor cost					430,000
		overhead assigned					821936
		total manufacturing cost					1,711,936
					total manufacturing
					cost
		job D-70			1,632,864
		Job C-200			1,711,936
	1c)	Bid price
					cost
		job D-70			2,122,724
		Job C-200			2,225,516
	1d)	cost of goods sold			3,344,800
2a	Departmental predetermined overhead rates
	Molding department
	Fixed manufacturing overhead			(780,000/23000)		33.91
	Variable manufacturing overhea					5.80
	predetermined overhead rate					39.71
	Fabrication department
	Fixed manufacturing overhead			(290,000/33000)		8.79
	Variable manufacturing overhea					5.80
	predetermined overhead rate					14.59
	Molding department			39.71	per MH
	Fabrication department			14.59	per MH
2b)	total manufacturing cost assinged
					job D-70
					molding	Fabrication	total
	Direct materials cost				370,000	330,000	700,000
	direct labor cost				220,000	140,000	360,000
	overhead assigned
	molding 39.71*15000				595695.7		595695.7
	Fabrication 14.59*8,000					116703	116703
	total manufacturing cost				1,185,696	586,703	1,772,399
	job c-200
					molding	Fabrication	total
	Direct materials cost				240,000	220,000	460,000
	direct labor cost				140,000	290,000	430,000
	overhead assigned
	molding	39.71*8000			317704.3		317704.3
	Fabrication 11.59*28000	12.84*30,000				364697	364697
	total manufacturing cost				697,704	874,697	1,572,401
				total manufacturing
				cost
	job D-70			1,772,399
	Job C-200			1,572,401
2c)	Bid price
				cost
	job D-70			2,304,118
	Job C-200			2,044,122
2d)	cost of goods sold			3,344,800