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: Molding Fabrication Total Machine-hours 24,000 33,000 57,000 Fixed manufacturing overhead cost $ 780,000 $ 240,000 $ 1,020,000 Variable manufacturing overhead cost per machine-hour $ 4.00 $ 1.50 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 $ 370,000 $ 320,000 $ 690,000 Direct labor cost $ 220,000 $ 140,000 $ 360,000 Machine-hours 14,000 10,000 24,000 Job C-200 Molding Fabrication Total Direct materials cost $ 300,000 $ 220,000 $ 520,000 Direct labor cost $ 160,000 $ 260,000 $ 420,000 Machine-hours 10,000 23,000 33,000 Delph had no underapplied or overapplied manufacturing overhead during the year. rev: 07_21_2020_QC_CS-217627 Required: 1. Assume Delph uses departmental predetermined overhead rates based on machine-hours. a. Compute the departmental predetermined overhead rates. 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 cost, 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?

Answer 1

a. Molding Department overhead rate = 780,000 + (24,000 x 4) /24,000

=36.5

Fabrication Department overhead rate = 240,000 + (33,000 x 1.50) /33,000

=8.77

b.

	D-70	C-200
Direct Materials	690,000.00	520,000.00
Direct Labor Cost	360,000.00	420,000.00
Overhead	598,700.00	566,710.00
Total Manufacturing cost	1,648,700.00	1,506,710.00

c.

	D-70	C-200
Direct Materials	690,000.00	520,000.00
Direct Labor Cost	360,000.00	420,000.00
Overhead	598,700.00	566,710.00
Total Manufacturing cost	1,648,700.00	1,506,710.00
Bid Prices	2,473,050.00	2,260,065.00

d. Cost of Goods Sold = 1,648,700 + 1,506,710

=3,155,410