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 56,000 machine-hours would be required for the periods estimated level of production. It also estimated $1,100,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $5.00 per machine-hour.

Because Delph has two manufacturing departmentsMolding and Fabricationit 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:

	Molding	Fabrication	Total
Machine-hours	22,000	34,000	56,000
Fixed manufacturing overhead cost	$ 800,000	$ 300,000	$ 1,100,000
Variable manufacturing overhead cost per machine-hour	$ 5.00	$ 2.00

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	$ 220,000	$ 180,000	$ 400,000
Machine-hours	15,000	7,000	22,000

Job C-200	Molding	Fabrication	Total
Direct materials cost	$ 240,000	$ 280,000	$ 520,000
Direct labor cost	$ 180,000	$ 280,000	$ 460,000
Machine-hours	7,000	27,000	34,000

Delph had no underapplied or overapplied manufacturing overhead during the year.

Exercise 2-15 (Algo) Part 2

Required: 2. 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?