Question

[The following information applies to the questions displayed below. 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: Total Molding Fabrication 36,000 26,000 Machine-hours Fixed manufacturing overhead costs Variable manufacturing overhead per machine-hour 62,000 280,000 $760,000 $ $1,040,000 $5.40 $ 5.40 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 379,000 $ 327,000 $706,000 $ 210,000 $ 120,000 $ 330,000 20,000 6,000 26,000 Job C-200: Direct materials cost Direct labor cost Machine-hours Molding Fabrication Total 260,000 $250,000 $ 510,000 $120,000 $240,000 $ 360,000 36,000 6,000 30,000 Delph had no overapplied or underapplied manufacturing overhead during the year

Answer 1

2)

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

a.

Compute the predetermined departmental overhead rates.

Calculation of Departmentwide Predetermined Overhead Rate:

Overhead Rate

= Total Fixed Manufacturing Expenses / Total Machine Hours + Variable Rate per Hour

For Molding:

760,000 / 26,000 + 5.4

= $34.63 per Machine Hour

For Fabrication:

280,000 / 36,000 + 5.4

= $13.78 per Machine Hour

Molding Department	34.63
Febrication Department	13.18

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b. Compute the total manufacturing costs assigned to Job D-70 & Job C-200.

	Job D-70	Job C-200
Direct Material Cost	706,000	510,000
Direct Labor Cost	330,000	360,000
Manufacturing Overhead	771682.05 (34.63 x 20,000)+ (13.18 x 6,000)	603,117.9 (34.63 x 6,000) + (13.18 x 30,000)
Total Cost Assigned	1,807,682.1	1,473,117.9

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c.

If Delph establishes bid prices that are 130% of total manufacturing costs, what bid price would it have established for Job D-70 & Job C-200?

	Job D-70	Job C-200
Total Manufacturing Cost	1,807,682	1,473,118
Add: Margin (30%)	542,305	441,935
Bid Price	2,349,987	1,915,053

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d. What is Delph's cost of goods sold for the year?

Cost of Goods Sold

= Total Cost of Job D-70 + Total Cost of Job C-200

Cost of Goods Sold

	Job D-70	Job C-200	Total
Cost of goods sold	1807682.051	1473117.949	3280800

Cost of Goods Sold =$3,280,800