Question

Saved work 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: Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding 27,000 $ 740,000 $ 6.10 Fabrication 37,000 $280,000 $ 6.10 Total 64,000 $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-701 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 370,000 $ 324,000 $694,000 $ 220,000 $ 170,000 $390,000 20,000 7.000 27.000 Job C-2001 Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $280.000 $ 230.000$ 510.000 $ 130,000 $ 270,000 $400,000 7.000 30,000 37,000 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 140% 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?

Answer 1

1a) Predetermine overhead rate = (1020000/64000+6.1) = 22.04 per hour

1b) Total manufacturing cost

	Job D-70	Job C-200
Direct material	694000	510000
Direct labor	390000	400000
Overhead	595080	815480
Total	1679080	1725480

1c) Bid price

	Job D-70	Job C-200
Bid price	2350712	2415672

1d) Cost of goods sold = 1679080+1725480 = 3404560

2a) Departmental overhead rate

Molding = (740000/27000+6.10) = 33.51 per Hour

Fabrication = (280000/37000+6.10) = 13.67 per hour

2b) Total manufacturing cost

	Job D-70	Job C-200
Direct material	694000	510000
Direct labor	390000	400000
Overhead
Molding	670200	234570
Fabrication	95690	410100
Total	1849890	1554670

2c) Bid price

	Job D-70	Job C-200
Bid price	1849890*1.4 = 2589846	1554670*1.4 = 2176538

2d) Cost of goods sold = 1849890+1554670 = 3404560