Exercise 2-15 Plantwide and Departmental Predetermined OverheadRates; Job Costs [LO2-1, LO2-2, LO2-3, LO2-4]

[The followinginformation applies to the questions displayedbelow.]

Delph Company uses ajob-order costing system and has two manufacturingdepartments—Molding and Fabrication. The company provided thefollowing estimates at the beginning of the year:

  

	Molding		Fabrication			Total
Machine-hours		31,000		41,000		72,000
Fixedmanufacturing overhead costs	$	740,000	$	210,000	$	950,000
Variablemanufacturing overhead cost per machine-hour	$	5.50	$	5.50

  

During the year, thecompany had no beginning or ending inventories and it started,completed, and sold only two jobs—Job D-70 and Job C-200. Itprovided the following information related to those two jobs:

  

Job D-70:	Molding		Fabrication		Total
Direct materialscost	$	378,000	$	322,000	$	700,000
Direct laborcost	$	230,000	$	160,000	$	390,000
Machine-hours		24,000		7,000		31,000

  

Job C-200:	Molding		Fabrication		Total
Direct materialscost	$	290,000	$	230,000	$	520,000
Direct laborcost	$	160,000	$	270,000	$	430,000
Machine-hours		7,000		34,000		41,000

Delph had nounderapplied or overapplied manufacturing overhead during theyear.

Exercise 2-15 Part 2

2. Assume Delph usesdepartmental predetermined overhead rates based onmachine-hours.

c. If Delphestablishes bid prices that are 140% of total manufacturing costs,what bid prices would it have established for Job D-70 and JobC-200?

d. What is Delph’scost of goods sold for the year?