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		25,000		35,000		60,000
Fixed manufacturing overhead costs	$	800,000	$	200,000	$	1,000,000
Variable manufacturing overhead cost per machine-hour	$	5.80	$	5.80

  

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	$	377,000	$	324,000	$	701,000
Direct labor cost	$	240,000	$	130,000	$	370,000
Machine-hours		18,000		7,000		25,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	300,000	$	280,000	$	580,000
Direct labor cost	$	110,000	$	230,000	$	340,000
Machine-hours		7,000		28,000		35,000

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

Exercise 2-15 Part 2

2. 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 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?

Compute the departmental predetermined overhead rates. (Round the final answers to 2 decimal places.)

	Pre determined overhead rates Molding Department per MH Fabrication Department per MH

Compute the total manufacturing cost assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)

	Total manufacturing cost Job D-70 Job C-200

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? (Round your intermediate calculations to 2 decimal places.)

	Bid price Job D-70 Job C-200

hat is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)

	Cost of goods sold

Answer 1