Delph 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 56,000 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 Molding 21,000 Fabrication Total 35,000 56,000 Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour $ 4.00 $1.00 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 $370,000 $320,000 $690,000 Direct labor cost $220,000 $180,000 $400,000 Machine-hours 14,000 7,000 21,000 Job C-200 Molding Fabrication Total Direct materials cost $ 260,000 $240,000 $500,000 Direct labor cost $160,000 $280,000 $440,000 Machine-hours 7,000 28,000 35,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours. 1. Compute the plantwide predetermined overhead rate. $ 780,000 $220,000 $1,000,000 2. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. 3. 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? 4. What is Delph's cost of goods sold for the year?
Delph 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 56,000 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 Molding 21,000 Fabrication Total 35,000 56,000 Fixed manufacturing overhead cost Variable manufacturing overhead cost per machine-hour $ 4.00 $1.00 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 $370,000 $320,000 $690,000 Direct labor cost $220,000 $180,000 $400,000 Machine-hours 14,000 7,000 21,000 Job C-200 Molding Fabrication Total Direct materials cost $ 260,000 $240,000 $500,000 Direct labor cost $160,000 $280,000 $440,000 Machine-hours 7,000 28,000 35,000 Delph had no underapplied or overapplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours. 1. Compute the plantwide predetermined overhead rate. $ 780,000 $220,000 $1,000,000 2. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. 3. 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? 4. What is Delph's cost of goods sold for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
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 56,000 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
Molding
21,000
Fabrication
35,000
Total
56,000
Fixed manufacturing overhead cost
$ 780,000
$220,000 $1,000,000
Variable manufacturing overhead cost per machine-hour $ 4.00
$1.00
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 $370,000
$320,000 $ 690,000
$180,000 $400,000
Direct labor cost $ 220,000
14,000
Machine-hours
7,000
21,000
Job C-200
Molding Fabrication Total
Direct materials cost $ 260,000 $240,000 $500,000
Direct labor cost $ 160,000 $280,000 $440,000
Machine-hours 7,000
28,000 35,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
Required:
1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours.
1. Compute the plantwide predetermined overhead rate.
2. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
3. 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?
4. What is Delph's cost of goods sold for the year?
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