$1,259,000 $2,400,000 Direct labor cost.. . Compute the total job cost for this
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$1,259,000 $2,400,000 Direct labor cost.. . Compute the total job cost for this particular film. EXERCISE 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs LO2-1, LO2-2, L02-3, LO2-4 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 20,000 30,000 $3.00 $%1.00 50,000 Fixed manufacturing overhead cost. . $700,000 $210,000 $910,000 Variable manufacturing overhead cost per machine-hour... 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.$375,000 $325,000 $700,000 Direct labor cost $200,000 $160,000 $360,000 14,000 6,000 20,000Explanation / Answer
option 1. Assuming that delph uses plantwide predetermined overhead rate based on machine hours
*for the plantwide predetermined overhead rate the total overheads are divided by the total machine hours
a. calculation of plantwide predetermined overhead rate
molding
$
fabrication
$
total
60,000
[20,000 machine hours *3 $]
30,000
[30,000 machine hours *1 $]
90,000
total machine hours
[ 20,000 + 30,000]
b.
Calculation of total manufacturing cost assingned to job D-70
molding
$
fabrication
$
total
200,000
160,000
360,000
280,000
[14000 machine hrs * 20$]
120,000
[6000 machine hrs * 20 $]
400,000
total manufacturing cost
Calculation of total manufacturing cost assingned to job C-200
molding
$
fabrication
$
total
175,000
225,000
400,000
120,000
[6000 machine hrs * 20$]
480,000
[24000 machine hrs * 20 $]
600,000
total manufacturing cost
c.
Calculation of bid prices for job D-70 and job C-200
d.
calculation of cost of goods sold of DELPH for the year
cost of goods sold of DELPH for the year is 3,010,000 $
2. Assuming that delph uses departmental predetermined overhead rate based on machine hours
a. calculation of plantwide predetermined overhead rate
molding
$
fabrication
$
20000
30000
variable manufacturing overheads per machine hour
(given in question)
38
[35 + 3]
8
[ 7+1]
b.
Calculation of total manufacturing cost assingned to job D-70
molding
$
fabrication
$
total
200,000
160,000
360,000
532,000
[14000 machine hrs * 38$]
48,000
[6000 machine hrs * 8 $]
580,000
total manufacturing cost
Calculation of total manufacturing cost assingned to job C-200
molding
$
fabrication
$
total
175,000
225,000
400,000
228,000
[6000 machine hrs * 38$]
192,000
[24000 machine hrs * 8 $]
420,000
total manufacturing cost
c.
Calculation of bid prices for job D-70 and job C-200
d.
calculation of cost of goods sold of DELPH for the year
cost of goods sold of DELPH for the year is 3,010,000 $
3. managerial insights:
the cost of goods sold for delph as a whole does not differ as per computations in 1 & 2
but taken independently for jobs - for job D-70 option 1 is better as it gives lower making cost and for job C-200 option two is better as it gives lower cost
the bid prices differ for job D-70 option 2 is better as it gives lower bid price and for job C-200 option 1 gives lower bid price which gives better edge for marketability.
particularsmolding
$
fabrication
$
total
fixed manufacturing overheads 700,000 210,000 910,000 variable manufacturing overheads60,000
[20,000 machine hours *3 $]
30,000
[30,000 machine hours *1 $]
90,000
total overheads 1,000,000total machine hours
[ 20,000 + 30,000]
50,000 hours plantwide overhead rate per unit 20 $Related Questions
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