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 | 32,000 | 42,000 | 74,000 | ||||
| Fixed manufacturing overhead costs | $ | 770,000 | $ | 270,000 | $ | 1,040,000 | |
| Variable manufacturing overhead cost per machine-hour | $ | 5.40 | $ | 5.40 | |||
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 | $ | 376,000 | $ | 329,000 | $ | 705,000 |
| Direct labor cost | $ | 240,000 | $ | 140,000 | $ | 380,000 |
| Machine-hours | 23,000 | 9,000 | 32,000 | |||
| Job C-200: | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 210,000 | $ | 290,000 | $ | 500,000 |
| Direct labor cost | $ | 120,000 | $ | 280,000 | $ | 400,000 |
| Machine-hours | 9,000 | 33,000 | 42,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Exercise 2-15 Part 2
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 120% 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?
| a | ||
| Predetermined overhead rate |
||
| Molding Department | 29.46 | =5.4+(770000/32000) |
| Fabrication Department | 11.83 | =5.4+(270000/42000) |
| b | ||
| Job D-70 | Job C-200 | |
| Direct materials cost | 705000 | 500000 |
| Direct labor cost | 380000 | 400000 |
| Overhead: | ||
| Molding Department | 677580 | 265140 |
| Fabrication Department | 106470 | 390390 |
| Total manufacturing cost | 1869050 | 1555530 |
| c | ||
| Job D-70 | Job C-200 | |
| Total manufacturing cost | 1869050 | 1555530 |
| Add: Markup @20% | 373810 | 311106 |
| Bid prices | 2242860 | 1866636 |
| d | ||
| Total manufacturing cost Job D-70 | 1869050 | |
| Total manufacturing cost Job C-200 | 1555530 | |
| Cost of goods sold | 3424580 | |
Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company...
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 32,000 42,000 74,000 Fixed manufacturing overhead costs $ 770,000 $ 270,000 $ 1,040,000 Variable manufacturing overhead cost per machine-hour $ 5.40 $ 5.40 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...
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 32,000 42,000 74,000 Fixed manufacturing overhead costs $ 770,000 $ 270,000 $ 1,040,000 Variable manufacturing overhead cost per machine-hour $ 5.40 $ 5.40 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...
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:MoldingFabricationTotalMachine-hours26,00036,00062,000Fixed manufacturing overhead costs$ 780,000$200,000$980,000Variable manufacturing overhead cost per machine-hour$ 5.40$ 5.40During 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:MoldingFabricationTotalDirect materials cost$374,000$322,000$696,000Direct labor cost$220,000$170,000$390,000Machine-hours17,0009,00026,000Job C-200:MoldingFabricationTotalDirect materials cost $210,000$210,000$210,000$420,000Direct labor...
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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 29,000 39,000 68,000 Fixed manufacturing overhead costs $ 730,000 $ 270,000 $ 1,000,000 Variable manufacturing overhead cost per machine-hour $ 6.10 $ 6.10 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...