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: Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead cost per machine-hour Molding Fabrication 21,000 31,000 $ 760,000 $ 300,000 $ 3.00 $ 2.00 Total 52,000 $1,060,000 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-70: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 370,000 $ 320,000 $ 690,000 $ 240,000 $ 160,000 $ 400,000 15,000 6,000 21,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total $ 220,000 $ 300,000 $ 520,000 $ 160,000 $ 280,000 $ 440,000 6,000 25,000 31,000 Delph had no underapplied or overapplied manufacturing overhead during 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 150% 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

Answers

• All working forms part of the answer
• Requirement 2

[a]

Working		Molding Department:	Fabrication Department:
A	Total Fixed Overheads	$                        760,000	$                          300,000
B	Total machine hours	21,000	31,000
C = A/B	Fixed overhead rate	$                            36.19	$                                 9.68
D	Variable Overhead rate	$                               3.00	$                                 2.00
E = C+D	Predetermined Departmental Overhead rates	$                            39.19	$                              11.68

[b]

	Job D 70	Job C 200
Molding Department:
Direct material cost	$                        370,000	$                          220,000
Direct Labor cost	$                        240,000	$                          160,000
Manufacturing Overhead	$                        587,850	$                          235,140
Fabrication Department:
Direct material cost	$                        320,000	$                          300,000
Direct Labor cost	$                        160,000	$                          280,000
Manufacturing Overhead	$                          70,080	$                          292,000
Total manufacturing cost assigned	$                    1,747,930	$                      1,487,140

[c]

		Job D 70	Job C 200
A	Total manufacturing cost assigned	$                    1,747,930	$                      1,487,140
B = A x 150%	Bid Price	$                    2,621,895	$                      2,230,710

[d]

Total manufacturing cost assigned
Job D 70	$                    1,747,930
Job C 200	$                    1,487,140
Cost of Goods Sold	$                    3,235,070