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8 ints Skipped eBook Print ferences Landen Corporation uses job-order costing. At the beginning of the year, it made the following estimates: Direct labor-hours required
8 ints Skipped eBook Print ferences Landen Corporation uses job-order costing. At the beginning of the year, it made the following estimates: Direct labor-hours required to support estimated production Machine-hours required to support estimated production 65,000 32,500 Fixed manufacturing overhead cost $ 195,000 Variable manufacturing overhead cost per direct labor-hour Variable manufacturing overhead cost per machine-hour During the year, Job 550 was started and completed. The following information pertains to this job: Direct materials Direct labor cost Direct labor-hours Machine-hours $ 1.20 $ 2.40 $ 250 $ 318 15 5 8-1 Required: 1. Assume Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? 2. Assume Landen's controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
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