Problem
Delph Company uses a job-order costing system and has two manufacturing departments-Molding and Fabrication. The company provided the following estimates at the beginning of the year:
Molding Fabrication Total
Machine-hours 23,000 33,000 56,000
Fixed manufacturing overhead cost $ 700,000 $ 240,000 $ 940,000
Variable manufacturing overhead cost per machine-hour $ 3.00 $ 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 15,000 8,000 23,000
Job C-200 Molding Fabrication Total
Direct materials cost $ 240,000 $ 220,000 $ 460,000
Direct labor cost $ 180,000 $ 280,000 $ 460,000
Machine-hours 8,000 25,000 33,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
Assume Delph uses departmental predetermined overhead rates based on machine-hours.
I. Compute the departmental predetermined overhead rates.
II. Compute the total manufacturing cost assigned to Job D-70 and Job C-200.
III. If Delph establishes bid prices that are 150% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200?
IV. What is Delph's cost of goods sold for the year?