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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
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 period's estimated level of production. It also estimated $980,000 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 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: Machine-hours Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour Molding 25,000 Fabrication 31,000 Total $ 740,000 $ 5.00 $ 240,000 $ 1.50 56,000 $980,000 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 $ 220,000 16,000 Fabrication $ 320,000 $ 120,000 9,000 Total $ 690,000 Job C-200 Direct materials cost Molding $ 220,000 Direct labor cost Machine-hours $ 180,000 9,000 Fabrication $ 220,000 $ 240,000 22,000 $ 340,000 25,000 Total $ 440,000 $ 420,000 31,000 Delph had no underapplied or overapplied manufacturing overhead during the year.
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