Homework SourseDelph 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 140% 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 | 22,000 | 32,000 | 54,000 | |||
| Fixed manufacturing overhead costs | $ | 740,000 | $ | 220,000 | $ | 960,000 |
| Variable manufacturing overhead cost per machine-hour | $ | 5.50 | $ | 5.50 | ||
Solution
Solution 1a:
Predetermined overhead rate = Total overhead /Total machine hours = ($960,000 + 54000*$5.50) /54000
= $23.28 per machine hour
Solution 1b:
Solution 1c:
Solution 1d:
Delph\'s cost of goods sold for the year = Cost of job D70 and C200 = $1,612,160 + $1,754,960 = $3,367,120
| Compuatation of manufacturing cost assigned to Job | ||
| Particulars | Job D70 | Job C200 |
| Direct Material | $700,000.00 | $560,000.00 |
| Direct Labor | $400,000.00 | $450,000.00 |
| Manufacturing overhead D 70 - 22000*$23.28 C200 - 32000*$23.28 | $512,160.00 | $744,960.00 |
| Total Manufacturing cost | $1,612,160.00 | $1,754,960.00 |
