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Please see the exercise on the attached document & show work. Thank you Managerial Accounting Exercise 3-17: Delph Company uses a job-order costing system and
Please see the exercise on the attached document & show work. Thank you
Managerial Accounting Exercise 3-17: Delph Company uses a job-order costing system and has two manufacturing departments-molding & fabrication. The company provided the following estimates at the beginning of the year: Molding Fabrication Total Machine hours..........................................20,000 30,000 50,000 Fixed manufacturing overhead.......... ..$700,000 $210,000 $910,000 Variable manufacturing overhead..........$3.00 $3.00 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 Molding Fabrication Total Direct materials cost............................$375,000 $325,000 $700,000 Direct labor cost...................................$200,000 $160,000 $360,000 Machine hours.......................................14,000 Job C-200 Molding 6,000 20,000 Fabrication Total Direct materials cost............................$300,000 $250,000 $550,000 Direct labor cost...................................$175,000 $225,000 $400,000 Machine hours........................................6,000 24,000 30,000 Delph had no overapplied or underapplied manufacturing overhead during the year. Required: 1) Assume Delph uses a plantwide overhead rate based on machine-hours. a. Compute the predetermined plantwide overhead rate. b. Compute the total manufacturing costs assigned to Job D-70 & Job C-200. c. If delph establishes bid prices that are 150% of the total manufacturing costs, what price would it have established for Job D-70 & Job C-200? d. What is Delph's cost of goods sold for the year? 2) Assume Delph uses departmental overhead rates based on machine-hours. a. Compute the predetermined departmental overhead rates. b. Compute the total manufacturing costs assigned to Job D-70 & Job C-200. c. If Delph establishes bid prices that are 150% of total manufacturing costs, what bid price would it have established for Job D-70 & Job C-200? d. What is Delph's cost of goods sold for the year? 3) What managerial insights are revealed by the computations that you performed in this problem? (Hint: Do the cost of goods sold amounts that you computed in requirements 1 & 2 differ from one another? Do the bid prices that you computed in requirements 1 & 2 differ from one another? why?)Step by Step Solution
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