[The following information applies to the questions displayed below.] Delph Comp

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[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:

  

  

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.

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

a. Compute the departmental predetermined overhead rates. ( Molding Department ___ per Mh, Fabrication Department ____ per Mh)

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

c. If Delph establishes bid prices that are 150% of total manufacturing costs, 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?

Molding Fabrication Total Machine-hours 25,000 35,000 60,000 Fixed manufacturing overhead costs $ 760,000 $ 250,000 $ 1,010,000 Variable manufacturing overhead cost per machine-hour $ 6.00 $ 6.00

Explanation / Answer

2a. Departmental Pre determined OH rate:

Molding Department = [Total Fixed OH of Molding Department / Machine Hours ] + Variable Cost per MH

Molding Department = [$760000 / 25000 ] + $6.00 = $36.40 Per MH

Fabrication Department = [Total Fixed OH of Fabrication Department / Machine Hours ] + Variable Cost per MH

Fabrication Department = [$250000 / 35000 ] + $6.00 = $13.14 Per MH

2b. Total Manufacturing Cost of Job D 70 & Job C 200

Manufacturing Cost of Job D-70 : Direct Materials + Direct Labor + Molding department Cost + Fabrication department Cost

Manufacturing Cost of Job D-70 : $699000 + $350000 + $36.40 * 19000 + $13.14 * 6000

Manufacturing Cost of Job D-70 : $699000 + $350000 + $691600 + $78840

Manufacturing Cost of Job D-70 : $1819440

Manufacturing Cost of Job C-200 : Direct Materials + Direct Labor + Molding department Cost + Fabrication department Cost

Manufacturing Cost of Job C-200 : $520000 + $440000 + $36.40 * 6000 + $13.14 * 29000

Manufacturing Cost of Job C-200 : $520000 + $440000 + $218400 + $381060

Manufacturing Cost of Job C-200 : $1559460

2c. Bid Prices for Job D-70 and Job C-200

Job D-70: Total Manufacturing cost * 150% = $1819440 * 150% = $2729160

Job C-200: Total Manufacturing cost * 150% = $1559460 * 150% = $2339190

2d. Delphs Cost of Goods sold for the year = Manufacturing cost of Job D-70 + Manufacturing cost of Job C-200

Delphs Cost of Goods sold for the year = $1819440 + $1559460

Delphs Cost of Goods sold for the year = $3378900

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