Delph Company uses a job-order costing 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 32,000 53,000 Fixed manufacturing overhead cost $ 740,000 $ 240,000 $ 980,000 Variable manufacturing overhead cost per machine-hour $ 4.00 $ 1.50 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 $ 220,000 $ 160,000 $ 380,000 Machine-hours 17,000 4,000 21,000 Job C-200 Molding Fabrication Total Direct materials cost $ 280,000 $ 200,000 $ 480,000 Direct labor cost $ 180,000 $ 280,000 $ 460,000 Machine-hours 4,000 28,000 32,000 Delph had no underapplied or overapplied manufacturing overhead during the year. rev: 07_21_2020_QC_CS-217627 Exercise 2-15 (Algo) Part 1 Required: 1. 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 cost, 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?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Delph Company uses a
| Molding | Fabrication | Total | ||||
| Machine-hours | 21,000 | 32,000 | 53,000 | |||
| Fixed manufacturing |
$ | 740,000 | $ | 240,000 | $ | 980,000 |
| Variable manufacturing overhead cost per machine-hour | $ | 4.00 | $ | 1.50 | ||
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 | $ | 220,000 | $ | 160,000 | $ | 380,000 |
| Machine-hours | 17,000 | 4,000 | 21,000 | |||
| Job C-200 | Molding | Fabrication | Total | |||
| Direct materials cost | $ | 280,000 | $ | 200,000 | $ | 480,000 |
| Direct labor cost | $ | 180,000 | $ | 280,000 | $ | 460,000 |
| Machine-hours | 4,000 | 28,000 | 32,000 | |||
Delph had no underapplied or overapplied manufacturing overhead during the year.
rev: 07_21_2020_QC_CS-217627
Exercise 2-15 (Algo) Part 1
Required:
1. Assume Delph uses departmental predetermined overhead rates based on machine-hours.
a. Compute the departmental predetermined overhead rates.
b. Compute the total
c. 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?
d. What is Delph’s cost of goods sold for the year?
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