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2 Delph Company uses a job-order costing system with a plantwide predetermined overhead rate based on machine- hours. At the beginning of the year,
2 Delph Company uses a job-order costing system with a plantwide predetermined overhead rate based on machine- hours. At the beginning of the year, the company estimated that 52,000 machine-hours would be required for the period's estimated level of production. It also estimated $1,020,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $5.00 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 20,000 $780,000 $ 5.00 Total 52,000 Fabrication. 32,000 $ 1,020,000 $ 240,000 $ 1.50 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 Job C-200 Direct materials cost Direct labor cost Machine-hours Holding $370,000 $220,000 15,000 Molding $300,000 $ 100,000 5,000 Fabrication $ 320,000 $160,000 5,000 Fabrication $ 240,000 $260,000 27,000 Total $690,000 $380,000 20,000 Total $540,000 $360,000 32,000
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