Question

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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		32,000		42,000	74,000
Fixed manufacturing overhead costs	$	720,000	$	280,000	$ 1,000,000
Variable manufacturing overhead per machine-hour	$	5.60	$	5.60

  

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	$	375,000	$	321,000	$	696,000
Direct labor cost	$	220,000	$	160,000	$	380,000
Machine-hours		24,000		8,000		32,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	260,000	$	270,000	$	530,000
Direct labor cost	$	120,000	$	230,000	$	350,000
Machine-hours		8,000		34,000		42,000

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

4.

value:
20.00 points

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 150% 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.

Check my work

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 150% 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

1a
Estimated Variable manufacturing overhead	414400	=(32000*5.6)+(42000*5.6)
Estimated Fixed manufacturing overhead	1000000
Total Estimated manufacturing overhead	1414400
Divide by Estimated Machine hours	74000
Predetermined overhead rate	19.11	per MH
1b
	Job D-70	Job C-200
Direct materials cost	696000	530000
Direct labor cost	380000	350000
Overhead applied	611520	802620
Total manufacturing cost	1687520	1682620
1c
	Job D-70	Job C-200
Total manufacturing cost	1687520	1682620
Add: Markup @50%	843760	841310
Bid prices	2531280	2523930
1d
Total manufacturing cost Job D-70	1687520
Total manufacturing cost Job C-200	1682620
Cost of goods sold	3370140
2a
	Predetermined overhead rate
Molding Department	28.10	=5.6+(720000/32000)
Fabrication Department	12.27	=5.6+(280000/42000)
2b
	Job D-70	Job C-200
Direct materials cost	696000	530000
Direct labor cost	380000	350000
Overhead:
Molding Department	674400	224800
Fabrication Department	98160	417180
Total manufacturing cost	1848560	1521980
2c
	Job D-70	Job C-200
Total manufacturing cost	1848560	1521980
Add: Markup @50%	924280	760990
Bid prices	2772840	2282970
2d
Total manufacturing cost Job D-70	1848560
Total manufacturing cost Job C-200	1521980
Cost of goods sold	3370540
Workings:
Overhead applied for 1:
Job D-70 = 32000*19.11= 611520
Job C-200 = 42000*19.11= 802620
Overhead applied for 2:
Job D-70
Molding Department = 24000*28.10=674400
Fabrication Department = 8000*12.27=98160
Job C-200
Molding Department = 8000*28.10=224800
Fabrication Department = 34000*12.27=417180