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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 50,000 machine-hours would be required for the period's estimated level of production. It also estimated $910,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $1.80 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 20,000 $ 700,000 $ 3.00 Fabrication 30,000 $ 210,000 $ 1.00 Total 50,000 $ 910,000 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: Total $ 160,000 6,000 $ 360,000 20,000 Job D-70 Direct materials cost Molding $ 375,000 Fabrication $ 325,000 $ 700,000 Direct labor cost Machine-hours $ 200,000 14,000 Job C-200 Molding Direct materials cost $ 300,000 Direct labor cost Machine-hours $ 175,000 6,000 $ 250,000 $ 225,000 24,000 Fabrication Total $ 550,000 $ 400,000 30,000 Delph had no underapplied or overapplied 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?
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