Delph Company uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours....
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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 estimated that 56,000 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 $4.00 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 22,000 $760,000 $ 4.00 Fabrication 34,000 $ 260,000 $ 2.00 Total 56,000 $ 1,020,000 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-78 Direct materials cost Total Direct labor cost Machine-hours Molding $370,000 $220,000 Fabrication Job C-200 16,000 Molding $ 320,000 $ 180,000 6,000 $ 690,000 $ 400,000 22,000 Direct materials cost $ 280,000 Direct labor cost $ 100,000 Machine-hours 6,000 Fabrication $260,000 $ 280,000 28,000 Total $540,000 $380,000 34,000 Delph had no underapplied or overspplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours. 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 Delph's cost of goods sold for the year? 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 $1,020,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 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 22,000 $760,000 $ 4.00 Fabrication 34,000 $ 260,000 $ 2.00 Total 56,000 $ 1,020,000 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-78 Direct materials cost Total Direct labor cost Machine-hours Molding $370,000 $220,000 Fabrication Job C-200 16,000 Molding $ 320,000 $ 180,000 6,000 $ 690,000 $ 400,000 22,000 Direct materials cost $ 280,000 Direct labor cost $ 100,000 Machine-hours 6,000 Fabrication $260,000 $ 280,000 28,000 Total $540,000 $380,000 34,000 Delph had no underapplied or overspplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours. 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 Delph's cost of goods sold for the year?
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Related Book For
Introduction to Managerial Accounting
ISBN: 978-1259103261
4th Canadian edition
Authors: Peter C. Brewer, Ray H Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan
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