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		21,000		31,000		52,000
Fixed manufacturing overhead costs	$	710,000	$	210,000	$	920,000
Variable manufacturing overhead cost per machine-hour	$	5.70	$	5.70

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	$	377,000	$	329,000	$	706,000
Direct labor cost	$	240,000	$	160,000	$	400,000
Machine-hours		15,000		6,000		21,000

  

Job C-200:	Molding		Fabrication		Total
Direct materials cost	$	260,000	$	270,000	$	530,000
Direct labor cost	$	130,000	$	290,000	$	420,000
Machine-hours		6,000		25,000		31,000

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

QUESTIONS:

1) Compute the departmental predetermined overhead rates. (Round the final answers to 2 decimal places.)

	Pre determined overhead rates
Molding Department		per MH
Fabrication Department		per MH

2) Compute the total manufacturing cost assigned to Job D-70 and Job C-200. (Round your intermediate calculations to 2 decimal places. Round your final answers to nearest whole dollar amount.)

	Total manufacturing cost
Job D-70
Job C-200

3. If Delph establishes bid prices that are 120% of total manufacturing costs, what bid prices would it have established for Job D-70 and Job C-200? (Round your intermediate calculations to 2 decimal places. Round your final answers to nearest whole dollar amount.)

	Bid price
Job D-70.
Job C-200

4. What is Delph’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places. Round your final answer to nearest whole dollar amount.)

Cost of goods sold

Answer 1

1) Compute the departmental predetermined overhead rates. (Round the final answers to 2 decimal places.)

	Pre determined overhead rates Molding Department 710000/21000+5.70 = 39.51 per MH Fabrication Department 210000/31000+5.70 = 12.47 per MH

2) Total manufacturing cost

	Job D-70	Job C-200
Direct material	706000	530000
Direct labor	400000	420000
Molding overhead	15000*39.51 = 592650	237060
Fabrication overhead	6000*12.47 = 74820	311750
Total manufacturing cost	1773470	1498810

3) Bid price

Job D-70 = 1773470*1.2 = 2128164

Job C-200 = 1498810*1.2 = 1798572

4) Cost of goods sold = 1773470+1498810 = $3272280