Delph Company uses a job-order costing system and has two manufacturing departmentsMolding and Fabrication. The company provided
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 | 20,000 | 30,000 | 50,000 |
Fixed manufacturing overhead cost | $ 700,000 | $ 210,000 | $ 910,000 |
Variable manufacturing overhead cost per machine-hour | $ 3.00 | $ 1.00 |
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 | $ 325,000 | $ 700,000 |
Direct labor cost | $ 200,000 | $ 160,000 | $ 360,000 |
Machine-hours | 14,000 | 6,000 | 20,000 |
Job C-200: | Molding | Fabrication | Total |
---|---|---|---|
Direct materials cost | $ 300,000 | $ 250,000 | $ 550,000 |
Direct labor cost | $ 175,000 | $ 225,000 | $ 400,000 |
Machine-hours | 6,000 | 24,000 | 30,000 |
Delph had no underapplied or overapplied manufacturing overhead during the year.
Required:
1. Assume Delph uses departmental predetermined overhead rates based on machine-hours.
a. Compute both departmental predetermined overhead rates.
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?
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer