Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the...
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Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 56,000 machine-hours would be required for the period's estimated level of production. It also estimated $1,000,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per machine-hour. Because Delph has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Molding 25,000 Fabrication 31,000 $ 780,000 $ 3.00 $ 220,000 $ 2.00 Total 56,000 $ 1,000,000 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 Direct materials cost Direct labor cost Machine-hours Molding $ 370,000 $ 200,000 14,000 Fabrication $ 320,000 $ 180,000 11,000 Job C-200 Direct materials cost Molding $ 260,000 Direct labor cost Machine-hours $ 100,000 11,000 $ 220,000 $ 260,000 20,000 Fabrication Total $ 690,000 $ 380,000 25,000 Total $ 480,000 $ 360,000 31,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates 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 costs, 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? Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 56,000 machine-hours would be required for the period's estimated level of production. It also estimated $1,000,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per machine-hour. Because Delph has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Molding 25,000 Fabrication 31,000 $ 780,000 $ 3.00 $ 220,000 $ 2.00 Total 56,000 $ 1,000,000 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 Direct materials cost Direct labor cost Machine-hours Molding $ 370,000 $ 200,000 14,000 Fabrication $ 320,000 $ 180,000 11,000 Job C-200 Direct materials cost Molding $ 260,000 Direct labor cost Machine-hours $ 100,000 11,000 $ 220,000 $ 260,000 20,000 Fabrication Total $ 690,000 $ 380,000 25,000 Total $ 480,000 $ 360,000 31,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates 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 costs, 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?
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Related Book For
Managerial Accounting
ISBN: 978-0077522940
15th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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