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 20,000 30,000 50,000
Fixed manufacturing overhead costs $ 700,000 $ 210,000 $ 910,000
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 $375,000 $325,000 $ 700,000
Direct labor cost $ 200,000 $ 160,000 $360,000
Machine-hours 14,000 6,000 20,000
Job C-200: Molding Fabrication Total
Direct materials cost $ 300,000 $250,000 $ 550,000
Direct labor cost $ 175,000 $225,000 $400,000
Machine-hours 6,000 24,000 30,000
Delph had no underapplied or overapplied manufacturing overhead during the year.
1. Assume Delph uses departmental predetermined overhead rates based on machine-hours.
a. Compute the departmental predetermined overhead rates.
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?