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

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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 estimated that $57,000$ machine$-$hours would be required for the period$$s estimated level of production. It also estimated $$960,000$ of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $$5\mathrm{.}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:

Molding Fabrication Total

Machine$-$hours $25,00032,00057,000$

Fixed manufacturing overhead cost $ $740,000$ $ $220,000$ $ $960,000$

Variable manufacturing overhead cost per machine$-$hour $ $5\mathrm{.}00$ $ $1\mathrm{.}50$

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 $ $370,000$ $ $320,000$ $ $690,000$

Direct labor cost $ $200,000$ $ $160,000$ $ $360,000$

Machine$-$hours $13,00012,00025,000$

Job C$-200$ Molding Fabrication Total

Direct materials cost $ $280,000$ $ $300,000$ $ $580,000$

Direct labor cost $ $120,000$ $ $260,000$ $ $380,000$

Machine$-$hours $12,00020,00032,000$

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 Delph$$s cost of goods sold for the year?

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