Question

In: Accounting

Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following...

Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4]

[The following information applies to the questions displayed below.]

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 31,000 41,000 72,000
Fixed manufacturing overhead costs $ 740,000 $ 210,000 $ 950,000
Variable manufacturing overhead cost per machine-hour $ 5.50 $ 5.50

  

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 $ 322,000 $ 700,000
Direct labor cost $ 230,000 $ 160,000 $ 390,000
Machine-hours 24,000 7,000 31,000

  

Job C-200: Molding Fabrication Total
Direct materials cost $ 290,000 $ 230,000 $ 520,000
Direct labor cost $ 160,000 $ 270,000 $ 430,000
Machine-hours 7,000 34,000 41,000

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.

c. If Delph establishes bid prices that are 140% 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?

Solutions

Expert Solution

1) computation of predetermined overhead rate based on machine hours
Predetermine overhead rate = Estimated total manufacturing overhead cost/estimated total amount of the allocation base
Calculation of Manufacturing overhead cost
Manufacturing oh cost = estimated total fixed manufacturing cost+estimated variable cost permachine hour for molding* machine hour for molding required to support estimated production +estimated variable manufacturing oh cost machine hour for facbrication * machine hour for fabrication required to support estimated production
total manufacturing overhead cost = 950000+(5.50*31000)+(5.50*41000)
total manufacturing overhead cost = 1346000
Computation of predetermine overhead rate
Predetermine overhead rate = Estimated total manufacturing overhead cost/estimated total amount of the allocation base
Predetermine overhead rate = 1346000/72000= 18.69
the plantwide predetermine overhead rate is $ 18.69 per machine hour
C) Calculation of Bid price of job D-70
first of all we have to calculate total manufacturing cost of job D-70
particulars Molding Fabrication total
Dierct material 378000 322000 700000
Direct labour 230000 160000 390000
overheads 448560 130830 579390
( machine hrs* predetermined rate) (24000*18.69) (7000*18.69)
total manufacturing cost 1056560 612830 1669390
total manufacturing cost for job D-70= 1669390
Total manufacturing cost to job C-200
particulars Molding Fabrication total
Dierct material 290000 230000 520000
Direct labour 160000 270000 430000
overheads 130830 635460 766290
( machine hrs* predetermined rate) (7000*18.69) (34000*18.69)
total manufacturing cost 580830 1135460 1716290
total manufacturing cost for job C-200 = 1716290
Bid Price of Job D-70
Total manufacturing cost = 1669390
Bid Price of Job D-70 = (140% * total manufacturing cost)
Bid Price of Job D-70= 140%*1669390
Bid price of JOB D-70= 2337146
Bid Price of Job C-200
Total manufacturing cost = 1716290
Bid Price of Job C-200 = (140% * total manufacturing cost)
Bid Price of Job C-200= 140%*1716290
Bid Price of Job C-200= 2402806
D) Cost of goods Sold = opening /beginning inventory +purchases- closing inventory
in the given question co has no opening and closing inventory when job started completed and production is sold during the year hence the
cost of goods sold during the year will be
Cost of goods Sold = manufacturing cost of joB D-70+Manufacturing cost of job C-200
Cost of goods sold = $1669390+$1716290
Cost of goods sold = $3385680

Related Solutions

Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following information applies to the questions displayed below.] 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 31,000 41,000 72,000 Fixed manufacturing overhead costs $ 740,000 $ 210,000 $ 950,000 Variable manufacturing overhead cost per machine-hour $ 5.50 $ 5.50    During the...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following information applies to the questions displayed below.] 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 31,000 41,000 72,000 Fixed manufacturing overhead costs $ 740,000 $ 210,000 $ 950,000 Variable manufacturing overhead cost per machine-hour $ 5.50 $ 5.50    During the...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following information applies to the questions displayed below.] 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 31,000 41,000 72,000 Fixed manufacturing overhead costs $ 740,000 $ 210,000 $ 950,000 Variable manufacturing overhead cost per machine-hour $ 5.50 $ 5.50    During the...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following information applies to the questions displayed below.] 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 31,000 41,000 72,000 Fixed manufacturing overhead costs $ 740,000 $ 210,000 $ 950,000 Variable manufacturing overhead cost per machine-hour $ 5.50 $ 5.50    During the...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4] [The following information applies to the questions displayed below.] 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 31,000 41,000 72,000 Fixed manufacturing overhead costs $ 740,000 $ 210,000 $ 950,000 Variable manufacturing overhead cost per machine-hour $ 5.50 $ 5.50    During the...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3,LO2-4] [The following information...
Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO2-1, LO2-2, LO2-3,LO2-4] [The following information applies to the questions displayed below.] 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 20,000 30,000 50,000 Fixed manufacturing overhead cost $ 700,000 $ 210,000 $ 910,000 Variable manufacturing overhead cost per machine-hour $ 3.00 $ 1.00 During the year, the...
Exercise 2-13 Departmental Predetermined Overhead Rates [LO2-1, LO2-2, LO2-4] White Company has two departments, Cutting and...
Exercise 2-13 Departmental Predetermined Overhead Rates [LO2-1, LO2-2, LO2-4] White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting Finishing Direct labor-hours 8,700 62,000 Machine-hours 64,600 3,400 Total fixed manufacturing overhead cost $ 390,000...
Exercise 2-11 Varying Plantwide Predetermined Overhead Rates [LO2-1, LO2-2, LO2-3] Kingsport Containers Company makes a single...
Exercise 2-11 Varying Plantwide Predetermined Overhead Rates [LO2-1, LO2-2, LO2-3] Kingsport Containers Company makes a single product that is subject to wide seasonal variations in demand. The company uses a job-order costing system and computes plantwide predetermined overhead rates on a quarterly basis using the number of units to be produced as the allocation base. Its estimated costs, by quarter, for the coming year are given below:     Quarter    First Second Third Fourth Direct materials $ 200,000 $ 100,000...
Case 2-22 Plantwide versus Departmental Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3, LO2-4] “Blast it!” said David...
Case 2-22 Plantwide versus Departmental Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3, LO2-4] “Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $2,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.” Teledex Company manufactures products to customers’ specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor...
Problem 2-16 Plantwide Predetermined Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3] Landen Corporation uses a job-order costing...
Problem 2-16 Plantwide Predetermined Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3] Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production 90,000 Machine-hours required to support estimated production 45,000 Fixed manufacturing overhead cost $ 252,000 Variable manufacturing overhead cost per direct labor-hour $ 2.40 Variable manufacturing overhead cost per machine-hour $ 4.80 During the year, Job 550 was started and completed. The following information is...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT