In: Accounting
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 | 21,000 | 32,000 | 53,000 | ||||
Fixed manufacturing overhead cost | $ | 700,000 | $ | 280,000 | $ | 980,000 | |
Variable manufacturing overhead cost per machine-hour | $ | 3.00 | $ | 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 | $ | 240,000 | $ | 140,000 | $ | 380,000 |
Machine-hours | 16,000 | 5,000 | 21,000 | |||
Job C-200 | Molding | Fabrication | Total | |||
Direct materials cost | $ | 280,000 | $ | 240,000 | $ | 520,000 |
Direct labor cost | $ | 140,000 | $ | 240,000 | $ | 380,000 |
Machine-hours | 5,000 | 27,000 | 32,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
Exercise 2-15 (Algo) Part 1
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?