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 32,000 42,000 74,000 Fixed manufacturing overhead costs $ 730,000 $ 230,000 $ 960,000 Variable manufacturing overhead cost per machine-hour $ 5.40 $ 5.40 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 $ 378,000 $ 324,000 $ 702,000 Direct labor cost $ 250,000 $ 160,000 $ 410,000 Machine-hours 25,000 7,000 32,000 Job C-200: Molding Fabrication Total Direct materials cost $ 270,000 $ 210,000 $ 480,000 Direct labor cost $ 100,000 $ 230,000 $ 330,000 Machine-hours 7,000 35,000 42,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Exercise 2-15 Part 1 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 130% 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