[The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 51,000 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 Molding $ 370,000 $ 220,000 Molding 21,000 $ 740,000 $ 4.00 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: Fabrication $ 320,000 $ 160,000 Fabrication 30,000 $ 260,000 $ 1.00 Total $ 690,000 $ 380,000 Total 51,000 $ 1,000,000
[The following information applies to the questions displayed below.] Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 51,000 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 Molding $ 370,000 $ 220,000 Molding 21,000 $ 740,000 $ 4.00 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: Fabrication $ 320,000 $ 160,000 Fabrication 30,000 $ 260,000 $ 1.00 Total $ 690,000 $ 380,000 Total 51,000 $ 1,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Concept explainers
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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[The following information applies to the questions displayed below.]
Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the
beginning of the year, the company estimated that 51,000 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
$ 300,000
$ 160,000
7,000
Fabrication
$ 320,000
$ 160,000
7,000
Molding
21,000
$ 740,000
$ 4.00
Fabrication
$ 220,000
$ 240,000
23,000
Total
$ 520,000
$ 400,000
30,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
Total
$ 690,000
$ 380,000
21,000
Fabrication
30,000
$ 260,000
$ 1.00
Required:
1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours.
Total
51,000
$ 1,000,000
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7cbbd39-e240-400c-aa00-3c97351af073%2Fad35aaa8-c87e-4193-9e86-94f39e821ca3%2Fkf1pxv3_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the
beginning of the year, the company estimated that 51,000 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
$ 300,000
$ 160,000
7,000
Fabrication
$ 320,000
$ 160,000
7,000
Molding
21,000
$ 740,000
$ 4.00
Fabrication
$ 220,000
$ 240,000
23,000
Total
$ 520,000
$ 400,000
30,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
Total
$ 690,000
$ 380,000
21,000
Fabrication
30,000
$ 260,000
$ 1.00
Required:
1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours.
Total
51,000
$ 1,000,000
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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