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 55,000 machine-hours would be required for the period's estimated level of production. It also estimated $980,000 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 Molding $ 370,000 $ 220,000 15,000 Molding $ 300,000 $ 160,000 9,000 Fabrication $ 320,000 $ 160,000 9,000 Molding 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: Fabrication $ 220,000 $ 260,000 22,000 24,000 $ 760,000 $ 4.00 Total $ 690,000 $ 380,000 24,000 Job C-200 Total Direct materials cost $ 520,000 Direct labor cost $ 420,000 31,000 Machine-hours Delph had no underapplied or overapplied manufacturing overhead during the year. Fabrication 31,000 $ 220,000 $ 1.50 Total 55,000 $ 980,000 Required: 2. 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?
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 55,000 machine-hours would be required for the period's estimated level of production. It also estimated $980,000 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 Molding $ 370,000 $ 220,000 15,000 Molding $ 300,000 $ 160,000 9,000 Fabrication $ 320,000 $ 160,000 9,000 Molding 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: Fabrication $ 220,000 $ 260,000 22,000 24,000 $ 760,000 $ 4.00 Total $ 690,000 $ 380,000 24,000 Job C-200 Total Direct materials cost $ 520,000 Direct labor cost $ 420,000 31,000 Machine-hours Delph had no underapplied or overapplied manufacturing overhead during the year. Fabrication 31,000 $ 220,000 $ 1.50 Total 55,000 $ 980,000 Required: 2. 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?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 28E: Minor Co. has a job order cost system and applies overhead based on departmental rates. Service...
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Process Costing
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.
Job Costing
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.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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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 55,000 machine-hours would be required for the period's
estimated level of production. It also estimated $980,000 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
Molding
$ 370,000
$ 220,000
15,000
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:
Fabrication
$ 320,000
$ 160,000
9,000
Molding
$ 300,000
$ 160,000
9,000
Molding
Fabrication
$ 220,000
$ 260,000
22,000
Total
$ 520,000
$ 420,000
31,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
24,000
$ 760,000
$ 4.00
Total
$ 690,000
$ 380,000
24,000
Fabrication
31,000
$ 220,000
$ 1.50
Total
55,000
$ 980,000
Required:
2. 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?
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