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 Fabrication. The company provided the following estimates at the beginning of the year:

  

  

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:

  

  

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

Required:

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

a. Compute the plantwide predetermined overhead rate.

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the plantwide predetermined overhead rate. (Round your answer to 2 decimal places.)

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

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)

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?

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. 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? (Round your intermediate calculations to 2 decimal places.)

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

Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. What is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)

Molding Fabrication Total Machine-hours 30,000 40,000 70,000 Fixed manufacturing overhead costs $ 770,000 $ 290,000 $ 1,060,000 Variable manufacturing overhead cost per machine-hour $ 5.80 $ 5.80

Explanation / Answer

a) Molding Department Estimated total manufacturing overhead cost = $770,000 + $5.80 x 30000 hrs $944,000.00 ÷ Estimated total machine-hours 30,000 Predetermined overhead rate $31.47 Per MH Fabrication Department Estimated total manufacturing overhead cost = $290,000 + $5.80 x 40000 hrs $522,000.00 ÷ Estimated total machine-hours 40,000 Predetermined overhead rate $13.05 Per MH b) Total manufacturing costs assigned to Jobs D-70 and C-200 D-70 C-200 Direct Material $704,000.00 $520,000.00 Direct Labour $370,000.00 $370,000.00 Molding Department (23,000 MHs × $31.47 per MH; 7,000 MHs × $31.47 per MH) $723,733.33 $220,266.67 Fabrication Department (7,000 MH × $13.05 per MH; 23,000 MH × $13.05 per MH) $91,350.00 $430,650.00 Total manufacturing cost $1,889,083.33 $1,540,916.67 c) Bid prices for Jobs D-70 and C-200 Total manufacturing cost $1,889,083.33 $1,540,916.67 × Markup percentage (140%) 140.00% 140.00% Bid price $2,644,716.67 $2,157,283.33 d) Cost of goods sold is equal to the sum of the manufacturing costs assigned to both jobs. Total manufacturing cost Job D-70 $1,889,083.33 Total manufacturing cost Job C-200 $1,540,916.67 Cost of goods sold $3,430,000.00

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