Exercise 3 17 (Algo) Plantwide and Departmental Predetermined Overhead Rates Job Costs LO3 1, LO3 2, LO3 3, LO3 4 Skip to question 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 58,000 machine hours would be required for the periods estimated level of production It also estimated $1,060,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4 00 per machine hour Because Delph has two manufacturing departmentsMolding 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 Molding Fabrication Total Machine hours 24,000 34,000 58,000 Fixed manufacturing overhead cost $ 780,000 $ 280,000 $ 1,060,000 Variable manufacturing overhead cost per machine hour $ 4 00 $ 1 00 During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobsJob D 70 and Job C 200 It provided the following information related to those two jobs Job D 70 Molding Fabrication Total Direct materials cost $ 370,000 $ 320,000 $ 690,000 Direct labor cost $ 200,000 $ 180,000 $ 380,000 Machine hours 15,000 9,000 24,000 Job C 200 Molding Fabrication Total Direct materials cost $ 220,000 $ 280,000 $ 500,000 Direct labor cost $ 140,000 $ 240,000 $ 380,000 Machine hours 9,000 25,000 34,000 Delph had no underapplied or overapplied manufacturing overhead during the year Exercise 3 17 (Algo) Part 2 Required Assume Delph uses departmental predetermined overhead rates based on machine hours Compute the departmental predetermined overhead rates Compute the total manufacturing cost assigned to Job D 70 and Job C 200 If Delph establishes bid prices that are 150 of total manufacturing cost, what bid prices would it have established for Job D 70 and Job C 200 What is Delphs cost of goods sold for the year

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 28, 2024

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

Exercise 3-17 (Algo) Plantwide and Departmental Predetermined Overhead Rates; Job Costs [LO3-1, LO3-2, LO3-3, LO3-4]

Skip to question

[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 58,000 machine-hours would be required for the periods estimated level of production. It also estimated $1,060,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per machine-hour.

Because Delph has two manufacturing departmentsMolding 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:

	Molding	Fabrication	Total
Machine-hours	24,000	34,000	58,000
Fixed manufacturing overhead cost	$ 780,000	$ 280,000	$ 1,060,000
Variable manufacturing overhead cost per machine-hour	$ 4.00	$ 1.00

During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobsJob D-70 and Job C-200. It provided the following information related to those two jobs:

Job D-70	Molding	Fabrication	Total
Direct materials cost	$ 370,000	$ 320,000	$ 690,000
Direct labor cost	$ 200,000	$ 180,000	$ 380,000
Machine-hours	15,000	9,000	24,000

Job C-200	Molding	Fabrication	Total
Direct materials cost	$ 220,000	$ 280,000	$ 500,000
Direct labor cost	$ 140,000	$ 240,000	$ 380,000
Machine-hours	9,000	25,000	34,000

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

Exercise 3-17 (Algo) Part 2

Required:

Assume Delph uses departmental predetermined overhead rates based on machine-hours.
1. Compute the departmental predetermined overhead rates.
2. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
3. If Delph establishes bid prices that are 150% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?
4. What is Delphs cost of goods sold for the year?