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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 costs	$	800,000	$	240,000	$	1,040,000
Variable manufacturing overhead cost per machine-hour	$	5.00	$	1.00

  

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	$	200,000	$	140,000	$	340,000
Machine-hours		14,000		10,000		24,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	240,000	$	240,000	$	480,000
Direct labor cost	$	140,000	$	280,000	$	420,000
Machine-hours		10,000		23,000		33,000

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

rev: 07_28_2020_QC_CS-217627

Required:

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

a. Compute the plantwide predetermined overhead rate.

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

1
a.		Molding	Fabrication
	Fixed manufacturing overhead	$800,000	$240,000
	Variable manufacturing overhead	$120,000	$33,000
	Total estimated manf. Overhead	$920,000	$273,000
	Estimated total machine hours	24,000	33,000
	Predetermined overhead rate	$38.33	$8.27
b.		Job D-70	Job C-200
	Manufacturing overhead
	Molding ($38.33 x 14,000), ($38.33 x 10,000)	$536,620	$383,300
	Fabrication ($8.27 x 10,000), ($8.27 x 23,000)	$82,700	$190,210
	Total Manufacturing Overhead	$619,320	$573,510
c.		Job D-70	Job C-200
	Direct materials:
	Molding	$370,000	$240,000
	Fabrication	$320,000	$240,000
	Direct labor cost:
	Molding	$200,000	$140,000
	Fabrication	$140,000	$280,000
	Manufacturing overhead
	Molding	$536,620	$383,300
	Fabrication	$82,700	$190,210
	Total cost	$1,649,320	$1,473,510
	Add: markup @150%	$824,660	$736,755
	Selling price	$2,473,980	$2,210,265
d.	Cost of goods sold	$3,122,830
	($1,649,320 + $1,473,510)