Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 3-17 (Algo) Plantwide and Departmental Predetermined Overhead Rates; Job Costs (LO3-1, LO3- 2, LO3-3, LO3-4] [The following information applies to the questions displayed

image text in transcribed

Exercise 3-17 (Algo) Plantwide and Departmental Predetermined Overhead Rates; Job Costs (LO3-1, LO3- 2, LO3-3, LO3-4] [The following information applies to the questions displayed below.) 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 54,000 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 23,000 $780,000 $ 4.00 Fabrication 31,000 Total $ 240,000 $ 1.00 54,000 $ 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-70 Direct materials cost Direct labor cost Machine-hours Fabrication $ 320,000 $ 180,000 8,000 Total $690,000 $ 400,000 23,000 Molding. $ 370,000 $220,000 15,000 Job C-200 Molding Pabrication Direct materials cost $ 240,000 Direct labor cost $ 100,000 Machine-hours 8,000 $ 260,000 $220,000 23,000 $ 320,000 31,000 Total $ 500,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Exercise 3-17 (Algo) Part 1 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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Management A Strategic Emphasis

Authors: Edward Blocher, David F. Stout, Paul Juras, Steven Smith

8th Edition

1259917029, 978-1259917028

More Books

Students also viewed these Accounting questions