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 $1,000,000 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 Job D-70 Direct materials cost Direct labor cost Machine-hours Job C-200 Direct materials cost Direct labor cost Machine-hours 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: Molding $ 370,000 $ 220,000 14,000 Molding $ 260,000 $ 160,000 9,000 Fabrication $ 320,000 $ 120,000 9,000 Molding 23,000 $ 740,000 $ 4.00 Fabrication $ 240,000 $ 300,000 22,000 Total $ 500,000 $ 460,000 31,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Total $ 690,000 $ 340,000 23,000 Fabrication 31,000 $ 260,000 $ 2.00 Total 54,000 $ 1,000,000 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?
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 $1,000,000 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 Job D-70 Direct materials cost Direct labor cost Machine-hours Job C-200 Direct materials cost Direct labor cost Machine-hours 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: Molding $ 370,000 $ 220,000 14,000 Molding $ 260,000 $ 160,000 9,000 Fabrication $ 320,000 $ 120,000 9,000 Molding 23,000 $ 740,000 $ 4.00 Fabrication $ 240,000 $ 300,000 22,000 Total $ 500,000 $ 460,000 31,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Total $ 690,000 $ 340,000 23,000 Fabrication 31,000 $ 260,000 $ 2.00 Total 54,000 $ 1,000,000 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?
Chapter1: Financial Statements And Business Decisions
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Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
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Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
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Transcribed Image Text: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 $1,000,000 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
Job D-70
Direct materials cost
Direct labor cost
Machine-hours
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:
Molding
$ 370,000
$ 220,000
14,000
Job C-200
Direct materials cost
Direct labor cost
Machine-hours
Fabrication
$ 320,000
$ 120,000
9,000
Molding
$ 260,000
$ 160,000
9,000
Molding
23,000
$ 740,000
$ 4.00
Total
$ 500,000
$ 460,000
31,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
Fabrication
$ 240,000
$ 300,000
22,000
Total
$ 690,000
$ 340,000
23,000
Fabrication
31,000
$ 260,000
$ 2.00
Total
54,000
$ 1,000,000
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?
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Step 1: Define Variable and fixed cost
VIEWStep 2: a) Compute the plantwide predetermined overhead rate
VIEWStep 3: b) Computation of total manufacturing cost
VIEWStep 4: c) The bid prices that have established by D for the both jobs
VIEWStep 5: d) Evaluating cost of goods sold for the year
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