Question
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
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 58,000 machine-hours would be required for the periods estimated level of production. It also estimated $980,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $3.00 per machine-hour.
Because Delph has two manufacturing 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:
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 Delphs cost of goods sold for the year?
Molding | Fabrication | Total | |
---|---|---|---|
Machine-hours | 23,000 | 35,000 | 58,000 |
Fixed manufacturing overhead cost | $ 700,000 | $ 280,000 | $ 980,000 |
Variable manufacturing overhead cost per machine-hour | $ 3.00 | $ 1.50 |
Job D-70 | Molding | Fabrication | Total |
---|---|---|---|
Direct materials cost | $ 370,000 | $ 320,000 | $ 690,000 |
Direct labor cost | $ 240,000 | $ 120,000 | $ 360,000 |
Machine-hours | 15,000 | 8,000 | 23,000 |
Job C-200 | Molding | Fabrication | Total |
---|---|---|---|
Direct materials cost | $ 260,000 | $ 260,000 | $ 520,000 |
Direct labor cost | $ 160,000 | $ 260,000 | $ 420,000 |
Machine-hours | 8,000 | 27,000 | 35,000 |
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