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		31,000		41,000	72,000
Fixed manufacturing overhead costs	$	750,000	$	270,000	$ 1,020,000
Variable manufacturing overhead per machine-hour	$	5.20	$	5.20

  

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	$	380,000	$	328,000	$	708,000
Direct labor cost	$	230,000	$	130,000	$	360,000
Machine-hours		21,000		10,000		31,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	230,000	$	280,000	$	510,000
Direct labor cost	$	160,000	$	270,000	$	430,000
Machine-hours		10,000		31,000		41,000

  
Delph had no overapplied or underapplied manufacturing overhead during the year.

4.

value:
20.00 points

Required information

Assume Delph uses a plantwide overhead rate based on machine-hours.

  

Required:

1-a.	Compute the predetermined plantwide overhead rate. (Round your answer to 2 decimal places.)

          

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

          

1-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.)

          

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

       

References

eBook & Resources

WorksheetLearning Objective: 02-01 Compute a predetermined overhead rate.Learning Objective: 02-03 Compute the total cost and average cost per unit of a job.

Difficulty: 2 MediumLearning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.

Check my work

5.

value:
25.00 points

Required information

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.)

         

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

          

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

	1a)	predetermined overhead rate
		variable overhead rate					5.2
		fixed manufacturing overhead			(1,020000/72000)=		0.01
		predetermined overhead rate					5.21
	1b)	total manufacturing cost assinged
		D-70
		Direct materials cost					708,000
		direct labor cost					360,000
		overhead assigned					161639
		total manufacturing cost					1,229,639
		job c-200
		Direct materials cost					510,000
		direct labor cost					430,000
		overhead assigned					213781
		total manufacturing cost					1,153,781
					total manufacturing
					cost
		job D-70			1,229,639
		Job C-200			1,153,781
	1c)	Bid price
					cost
		job D-70			1,598,531
		Job C-200			1,499,915
	1d)	cost of goods sold			2,383,420
2a	Departmental predetermined overhead rates
	Molding department
	Fixed manufacturing overhead			(750,000/31000)		24.19
	Variable manufacturing overhea					5.20
	predetermined overhead rate					29.39
	Fabrication department
	Fixed manufacturing overhead			(270,000/41000)		6.59
	Variable manufacturing overhea					5.20
	predetermined overhead rate					11.79
	Molding department			29.39	per MH
	Fabrication department			11.79	per MH
2b)	total manufacturing cost assinged
					job D-70
					molding	Fabrication	total
	Direct materials cost				380,000	328,000	708,000
	direct labor cost				230,000	130,000	360,000
	overhead assigned
	molding				617264.5		617264.5
	Fabrication					117853.7	117853.7
	total manufacturing cost				1,227,265	575,854	1,803,118
	job c-200
					molding	Fabrication	total
	Direct materials cost				230,000	280,000	510,000
	direct labor cost				160,000	270,000	430,000
	overhead assigned
	molding	39.71*8000			293935.5		293935.5
	Fabrication 11.59*28000	12.84*30,000				365346.3	365346.3
	total manufacturing cost				683,935	915,346	1,599,282
				total manufacturing
				cost
	job D-70			1,803,118
	Job C-200			1,599,282
2c)	Bid price
				cost
	job D-70			2,344,054
	Job C-200			2,079,066
2d)	cost of goods sold			3,402,400