Exercise 2-15 Plantwide and Departmental Predetermined Overhead Rates; Job Costs

The following information applies to the question displayed below.

Delph Company uses a job-order system and has two manufacturing departments- Molding and Fabrication.

The company provided the following estimates at the beginning of the year.

Molding Fabrication Total

Machine-hours 21,000.00 32,000.00 53,000.00

Fixed manufacturing overhead costs $720,000.00 $240,000.00 $960,000.00

Variable manufacturing overhead cost per machine-hour $5.00 $1.50

During the year, the company had no beginning or ending inventories and it started, completed, and sold only tow jobs-

Job D-70 and Job C-200. It provided the following information related to those two jobs.

JOB D-70 Molding Fabrication Total

Direct materials costs $370,000.00 $320,000.00 $690,000.00

Direct labor cost $240,000.00 $180,000.00 $420,000.00

Machine-hours 16,000.00 5,000.00 21,000.00

JOB C-200 Molding Fabrication Total

Direct materials costs $280,000.00 $300,000.00 $580,000.00

Direct labor cost $140,000.00 $220,000.00 $360,000.00

Machine-hours 5,000.00 27,000.00 32,000.00

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

Exercise 2-15 Part 2

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 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?