Question
Delph Company uses a job-order costing system and has two manufacturing departmentsMolding and Fabrication. The company provided the following estimates at the beginning of the
Delph Company uses a job-order costing system and has two manufacturing departmentsMolding and Fabrication. The company provided the following estimates at the beginning of the year:
Molding | Fabrication | Total | |||||
Machine-hours | 24,000 | 35,000 | 59,000 | ||||
Fixed manufacturing overhead cost | $ | 760,000 | $ | 260,000 | $ | 1,020,000 | |
Variable manufacturing overhead cost per machine-hour | $ | 3.00 | $ | 1.50 | |||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobsJob 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 | $ | 370,000 | $ | 320,000 | $ | 690,000 |
Direct labor cost | $ | 200,000 | $ | 160,000 | $ | 360,000 |
Machine-hours | 14,000 | 10,000 | 24,000 | |||
Job C-200 | Molding | Fabrication | Total | |||
Direct materials cost | $ | 240,000 | $ | 280,000 | $ | 520,000 |
Direct labor cost | $ | 160,000 | $ | 240,000 | $ | 400,000 |
Machine-hours | 10,000 | 25,000 | 35,000 | |||
Assume Delph uses departmental predetermined overhead rates based on machine-hours.
a. Compute the 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 Delphs cost of goods sold for the year?
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