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.
a. Compute thedepartmental predetermined overhead rates.
b. Compute the totalmanufacturing cost assigned to Job D-70 and Job C-200.
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?
