Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company...

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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		24,000		34,000		58,000
Fixed manufacturing overhead costs	$	720,000	$	280,000	$	1,000,000
Variable manufacturing overhead cost per machine-hour	$	5.60	$	5.60

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	$	377,000	$	328,000	$	705,000
Direct labor cost	$	240,000	$	180,000	$	420,000
Machine-hours		17,000		7,000		24,000

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	270,000	$	210,000	$	480,000
Direct labor cost	$	110,000	$	290,000	$	400,000
Machine-hours		7,000		27,000		34,000

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

Exercise 2-15 Part 1

Required:

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

a. Compute the plantwide predetermined overhead rate.

b. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.

c. If Delph establishes bid prices that are 140% of total manufacturing cost, 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?

business accounting

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Answer 1

Answer #1

OH rate per DLH
Total fixed Overheads		1000000
Divide: MH		58000
Fixed OH rate per MH			17.24
Variable OH rate per MH			5.6
OH rate per MH			22.84

OH applied:
	Job D-70	Job C-200
MH used	24000	34000
Multiply: OH rate	22.84	22.84
OH applied	548160	776560

Total Manufacturing Cost
		Job D-70	Job C-200
Direct Material cost		705000	480000
Direct Labour cost		420000	400000
Manufacturing OH		548160	776560
Total manufacturing cost		1673160	1656560


		Job D-70	Job C-200
Total MFg cost		1673160	1656560
Add: Markup @ 40%		669264	662624
Bid price		2342424	2319184

Cost of good s sold:
Job D- 70	1673160
Job C-200	1656560
Cost of good s sold:	3329720

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Answer 2

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