Delph Company uses a joborder costing system and has two man

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:

  

  

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:

  

  

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

Required:

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?

	Molding	Fabrication		Total
Machine-hours		25,000		35,000		60,000
Fixed manufacturing overhead costs	$	760,000	$	250,000	$	1,010,000
Variable manufacturing overhead cost per machine-hour	$	6.00	$	6.00

Solution

Molding Fabrication Total Machine-hours 25,000 35,000 60,000 Fixed manufacturing overhead costs $ 760,000 $ 250,000 $ 1,010,000 Variable manufacturing overhead cost per machine-hour $ 6 $ 6 Compute the plantwide predetermined overhead rate a The plantwide predetermined rate is 1010000/60000                    16.83 b Total manufacturing cost assigned to Job D-70 and Job C-200 Job D-70 19000*(1010000/60000) 319833.3 6000*(1010000/60000) 101000 Total Manufacturing expenses 420833 Job C-200 6000*(1010000/60000) 101000 29000*(1010000/60000) 488166.7 Total Manufacturing expenses 589167 c) Bid prices for Job D-70 150% of 420833 631250 Bid prices for Job C- 200 150% of 589167 883751 d) Cost of Goods Sold Direct material costs 699000+520000 1219000 Direct Labor costs 350000+440000 790000 Variable Manufacturing overhead 60000*6 360000 Fixed manufacturing overhead costs 1010000 1010000 Cost of Goods sold 3379000