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:

	Molding		Fabrication		Total
Machine-hours		24,000		34,000	58,000
Fixed manufacturing overhead costs	$	790,000	$	250,000	$ 1,040,000
Variable manufacturing overhead per machine-hour	$	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:

Job D-70:	Molding		Fabrication		Total
Direct materials cost	$	375,000	$	326,000	$	701,000
Direct labor cost	$	200,000	$	140,000	$	340,000
Machine-hours		15,000		9,000		24,000

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	200,000	$	230,000	$	430,000
Direct labor cost	$	170,000	$	260,000	$	430,000
Machine-hours		9,000		25,000		34,000

1-b.	Compute the total manufacturing costs assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)

Assume Delph uses departmental overhead rates based on machine-hours.

2-a.	Compute the predetermined departmental overhead rates. (Round your answer to 2 decimal places.)

	Predetermined overhead rates Molding Department per MH Fabrication Department per MH

2-b.	Compute the total manufacturing costs assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)
	Total manufacturing cost Job D-70 Job C-200

2-c.	If Delph establishes bid prices that are 130% of total manufacturing costs, what bid price would it have established for Job D-70 and Job C-200? (Round your intermediate calculations to 2 decimal places.)

2-d.	What is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)

Answer 1

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Answers are highlighted in yellow: Rounding instruction is not given, answer can be highlighted in blue: Solution: 1)b Particulars Direct Material Direct Labor Manufacturing overhead (24000*23.73); (34000*23.73) Total Manufacturing cost Job D70 701000 340000 569520 1610520 Job C200 430000 430000 806820 1666820 2) Predtermined overhead rate = Estimated overhead / Base Overhead rate - Molding Department: Fixed Overhead (790000/24000) Variable overhead Predetermined Overhead rate - Molding Department $ $ $ 32.92 5.80 38.72 a) Overhead rate - Fab Department: Fixed Overhead (250000/34000) Variable overhead Predetermined Overhead rate - Fab Department $ $ $ 7.35 5.80 13.15 a) Particulars Direct Material Direct Labor Applied overhead (Molding) Applied overhead (Fab) Total Manufacturing cost Mark up - 130% Bid Price of the Job (15000*38.72) (9000*38.72) (9000*13.15) (25000*13.15) job D-70 701000 340000 580800 118350 1740150 522045 2262195 job C-200 job D-70 job C-200 430000 701000 430000 430000 340000 430000 348480 554338 346462 328750 138556 360244 1537230 1733894 1566706 461169 1998399 2254062 2036718 b) d) Cost of goods sold (1740150+1537230) 3277380 3300600