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		33,000		43,000	76,000
Fixed manufacturing overhead costs	$	720,000	$	270,000	$ 990,000
Variable manufacturing overhead per machine-hour	$	5.90	$	5.90

  

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	$	379,000	$	327,000	$	706,000
Direct labor cost	$	250,000	$	140,000	$	390,000
Machine-hours		24,000		9,000		33,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	220,000	$	290,000	$	510,000
Direct labor cost	$	140,000	$	270,000	$	410,000
Machine-hours		9,000		34,000		43,000

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

4. Required information

Assume Delph uses a plantwide overhead rate based on machine-hours.

  

Required:

1-a.	Compute the predetermined plantwide overhead rate. (Round your answer to 2 decimal places.)

          

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

          

1-c.	If Delph establishes bid prices that are 130% of total manufacturing costs, what bid price would it have established for Job D-70 and Job C-200? (Round your intermediate calculations to 2 decimal places.)

          

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

       

References

eBook & Resources

WorksheetLearning Objective: 02-01 Compute a predetermined overhead rate.Learning Objective: 02-03 Compute the total cost and average cost per unit of a job.

Difficulty: 2 MediumLearning Objective: 02-02 Apply overhead cost to jobs using a predetermined overhead rate.

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5.

value:
25.00 points

Required information

Assume Delph uses departmental overhead rates based on machine-hours.

  

2-a.	Compute the predetermined departmental overhead rates. (Round your answer to 2 decimal places.)

         

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

          

2-c.	If Delph establishes bid prices that are 130% of total manufacturing costs, what bid price would it have established for Job D-70 and Job C-200? (Round your intermediate calculations to 2 decimal places.)

          

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

       

Answer 1

Req 4.
Plantwide OH rate:
Fixed OH perr MH (990000/76000)			13.03
Variable OH			5.9
OH rate per MH			18.93
Cost of Jobs:
		Job D-70	Job C-200
Direct Material\		706000	510,000
Direct Labour		390000	410,000
OH applied		624690	813,990
Total Manufacturing cost		1720690	1733990
Bid price
		Job D-70	Job C-200
Total Manufacturing cost		1720690	1733990
Add: Markup @30%		516207	520197
Bid price		2236897	2254187
Cost of goods sold:
Job D-70		2236897
Job C-200		2254187
Total cost of goods sold		4491084
Req 5.
Deppt OH rate:
Molding:
Fixed OH rate (720000/33000)			21.82
Variable OH			5.9
Oh rate			27.72
Fabrication:
Fixed OH rate (270000/43000)			6.28
Variable OH			5.9
OH rate			12.18
Cost of Jobs:
		Job D-70	Job C-200
Direct Material\		706000	510,000
Direct Labour		390000	410,000
OH applied
Molding @ 27.72		665280	249480
Fabrication @12.18		109620	414120
Total Manufacturing cost		1870900	1583600
Bid price
		Job D-70	Job C-200
Total Manufacturing cost		1870900	1583600
Add: Markup @30%		561270	475080
Bid price		2432170	2058680
Cost of goods sold:
Job D-70		2432170
Job C-200		2058680
Total cost of goods sold		4490850