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 29,000 Fabrication 39,000 250,000 Total 68,000 Machine-hours $ 760,000 $ 1,010,000 Fixed manufacturing overhead costs Variable manufacturing overhead per machine-hour 5.50 $ 5.50 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: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 376,000 $ 329,000 $ 705,000 $ 250,000 $ 170,000 $ 420,000 22,000 7,000 29,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 300,000 $ 230,000 $ 530,000 $ 170,000 $ 290,000 $ 460,000 7,000 32,000 39,000 Delph had no overapplied or underapplied manufacturing overhead during the year.

Answer 1

1a) Predetermine overhead rate = (1010000/68000+5.5) = 20.35 per MH

1b) Total manufacturing cost

	Job D-70	Job C-200
Direct material	705000	530000
Direct labor	420000	460000
Overhead	29000*10.35 = 300150	39000*10.35 = 403650
Total manufacturing cost	1425150	1393650

1c) Bid price

Job D-70 = 1425150*1.2 = $1710180

Job C-200 = 1393650*1.2 = 1672380

1d) Cost of goods sold = 1425150+1393650 = $2818800