Question

In: Accounting

Delph Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company...

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 33,000 43,000 76,000
Fixed manufacturing overhead costs $ 730,000 $ 270,000 $ 1,000,000
Variable manufacturing overhead cost per machine-hour $ 5.20 $ 5.20

  

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 $ 323,000 $ 697,000
Direct labor cost $ 220,000 $ 120,000 $ 340,000
Machine-hours 25,000 8,000 33,000

  

Job C-200: Molding Fabrication Total
Direct materials cost $ 260,000 $ 230,000 $ 490,000
Direct labor cost $ 140,000 $ 250,000 $ 390,000
Machine-hours 8,000 35,000 43,000

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

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 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?

Solutions

Expert Solution

1 Computation of the departmental predetermine overhead rates
Moulding Fabrication
FMOH $730,000 $270,000
Machine Hrs 33000 43000
Fixed MOH per MH $22.12 $6.28
Variable MOH per MH $5.20 $5.20
Departmental OH per MH $27.32 $11.48
2 Computation of Total Manufacturing Cost Assigned to Job D-70 and Job -C 200
Job D70 Job C200
DM $697,000 $490,000
DL $340,000 $390,000
MOH
33000*$27.32 $901,560
43000*$11.48 $493,640
Total Cost Assigned $1,938,560 $1,373,640
3 Computation of Total Manufacturing Cost Assigned to Job D-70 and Job -C 200
Job D70 Job C200
DM $374,000 $323,000
DL $220,000 $120,000
MOH
33000*$27.32 $901,560
43000*$11.48 $493,640
Total Cost Assigned $1,495,560 $936,640
150% of Manifacturing cost $2,243,340 $1,404,960
4 Cost of good sold Job D70 Job C200
DM $697,000 $490,000
DL $340,000 $390,000
MOH
33000*$27.32 $901,560
43000*$11.48 $493,640
Total Cost Assigned $1,938,560 $1,373,640
Cost of Good Sold $3,312,200

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