Delph Company uses a job-order costing system and has two manufacturing departme

Question

Delph Company uses a job-order costing system and has two manufacturing departments-Molding and Fabri company provided the following estimates at the beginning of the year otal 66, 000 Machine-hours Fixed manufacturing overhead costs 28, 000 $800, 000 38, 000 $ 250, 000 $1,050, 000 Variable manufacturing overhead cost per machine-hour5.60 5.60 During the year, the company had no beginning or ending inventories and it started, complet Molding Fabrication Total ed, 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 $ 370,000 $ 327, 000 $697,000 Direct labor cost Machine-hours $ 230,000 20, 000 160, 000 $390,000 28, 000 8, 000 Job C-200:Molding Fabrication Total Direct materials cost $ 260, 000 Direct labor cost Machine-hours S 150, 000 8, 000 280, 030 $540, 000 220, 000 $370,000 30, 000 38, 000 Delph had no underapplied or overapplied manufacturing overhead during the year

Explanation / Answer

2a. Departmental OH Rates

Per detrmined OH Rate = Overhead cost / Machine hours

Molding Department:

Overhead Cost = Fixed MOH + Variable MOH

Overhead Cost = $800000 + $5.60 * 28000

Overhead Cost = $800000 + $156800

Overhead Cost = $956800

Molding - Per detrmined OH Rate = Overhead cost / Machine hours

Molding - Per detrmined OH Rate = $956800 / 28000 = $34.17 per hour

Fabrication Department:

Overhead Cost = Fixed MOH + Variable MOH

Overhead Cost = $250000 + $5.60 * 38000

Overhead Cost = $250000 + $212800

Overhead Cost = $462800

Fabrication - Per determined OH Rate = Overhead cost / Machine hours

Fabrication - Per determined OH Rate = 462800 / 38000 = $12.18 per hour

2b. Computation of Total Manufacturing cost assigned to Jobs

Job D-70:

Costs = Direct Material + Direct Labor + Molding department costs + Fabrication department cost

Costs = 697000 + 390000 + 20000 * 34.17 + 8000 * 12.18

Costs assigned = 697000 + 390000 + 20000 * 34.17 + 8000 * 12.18

Costs assigned = $1867860.15

Job C-200:

Costs = Direct Material + Direct Labor + Molding department costs + Fabrication department cost

Costs = 540000 + 370000 + 8000 * 34.17 + 30000 * 12.18

Costs assigned = 697000 + 390000 + 20000 * 34.17 + 8000 * 12.18

Costs assigned = $1548739.85

2c. Computation of Bid Prices

Job D-70

Bid Price = Total Costs * 120% = $1867860.15 * 120% = $2241432.18

Job C-200

Bid Price = Total Costs * 120% = $1548739.85 * 120% = $1858487.82

2d. Cost of Goods Sold for the year

Cost of Goods Sold = Cost of D-71 + Cost of C-200

Cost of Goods Sold = $1548739.85 + $1867860.15

Cost of Goods Sold = $3416600

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