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		34,000		58,000
Fixed manufacturing overhead costs	$	780,000	$	240,000	$	1,020,000
Variable manufacturing overhead cost per machine-hour	$	6.00	$	6.00

  

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	$	374,000	$	321,000	$	695,000
Direct labor cost	$	230,000	$	170,000	$	400,000
Machine-hours		16,000		8,000		24,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	300,000	$	210,000	$	510,000
Direct labor cost	$	150,000	$	220,000	$	370,000
Machine-hours		8,000		26,000		34,000

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

QUESTIONS:

1: Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places.)

2. Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. 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? (Round your intermediate calculations to 2 decimal places.)

3.Assume Delph uses a plantwide predetermined overhead rate based on machine-hours. What is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)

Answer 1

Working Notes,

Given,
		Molding	Fabrication	Total
A	Machine-hours	24,000	34,000	58,000
B	Fixed manufacturing overhead costs	7,80,000	2,40,000	10,20,000
C	Fixed manufacturing overhead cost per machine hour	C=B/A		$ 17.59
	Variable manufacturing overhead cost per machine-hour	$ 6	$ 6

1. ans

	Job D-70:	Molding	Fabrication	Total
A	Direct materials cost	$     3,74,000.00	$     3,21,000.00	$    6,95,000.00
B	Direct labor cost	$     2,30,000.00	$     1,70,000.00	$    4,00,000.00
C	Machine-hours	16,000	8,000	24,000
D	Fixed cost (C x $ 17.59)	$     2,81,440.00	$     1,40,720.00	$    4,22,160.00
E	Variable cost( C x 6)	$        96,000.00	$        48,000.00	$    1,44,000.00
	Total cost(A + B+D+E)	9,81,440	6,79,720	16,61,160

	Job C-200:	Molding	Fabrication	Total
A	Direct materials cost	$     3,00,000.00	$     2,10,000.00	$    5,10,000.00
B	Direct labor cost	$     1,50,000.00	$     2,20,000.00	$    3,70,000.00
C	Machine-hours	8,000	26,000	34,000
D	Fixed cost (C x $ 17.59)	$     1,40,720.00	$     4,57,340.00	$    5,98,060.00
E	Variable cost( C x 6)	$        48,000.00	$     1,56,000.00	$    2,04,000.00
	Total cost(A + B+D+E)	$     6,38,720.00	$ 10,43,340.00	$ 16,82,060.00

2. ans

	Job D-70	Job C-200
Total cost(A)	$ 16,61,160.00	$ 16,82,060.00
Bid prices(A x 130%)	$ 21,59,508.00	$ 21,86,678.00

3.ans Cost of Goods Sold for the year Total cost of (Job D-70 + Job C- 200) Cost of Goods Sold for the year $ 33,43,220.00 (1661160+1682060)