FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Delph Company uses a
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:
| Molding | Fabrication | Total | |
| Machine-hours | 24,000 | 31,000 | 55,000 |
| Fixed manufacturing overhead cost | 760,000 | 220,000 | 980,000 |
| Variable manufacturing overhead cost per machine-hour | $4.00 | $1.50 |
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 | $160,000 | $380,000 |
| Machine-hours | 15,000 | 9,000 | 24,000 |
| Job C-200 | Molding | Fabrication | Total |
|---|---|---|---|
| Direct materials cost | $300,000 | $220,000 | $520,000 |
| Direct labor cost | $160,000 | $260,000 | $420,000 |
| Machine-hours | 9,000 | 22,000 | 31,000 |
Delph had no underapplied or overapplied manufacturing overhead during the year.
1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours.
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
d. What is Delph’s cost of goods sold for the year?
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