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a-1. Assume the St. Falls plant uses a single plantwide overhead rate to assign all overhead (plantwide and department) costs to jobs. Find the overhead
a-1. Assume the St. Falls plant uses a single plantwide overhead rate to assign all overhead (plantwide and department) costs to jobs. Find the overhead rate by using expected direct labor hours.
a-2. Determine the projected amount of total manufacturing costs per unit for the units in job no. 110.
b-1. Find the plant wide overhead rate by using expected machine hours.
b-2. Find the department overhead rate using expected machine hours for Department A and Department B.
b-2. Calculate the projected manufacturing costs for job 110 using the three separate rates computed in b-1 and b-2.
c-1. The sales policy at St. Falls dictates that job bids be calculated by adding 24 percent to total manufacturing costs. What would be the bid for job no. 110 using the overhead rate from part a?
c-2. The sales policy at St. Falls dictates that job bids be calculated by adding 24 percent to total manufacturing costs. What would be the bid for job no. 110 using the overhead rate from part b?
c-3. Which of the overhead allocation methods would you recommend?
d. Using the allocation rates in part b, compute the under- or overapplied overhead for the St. Falls plant for the year. (Round your intermediate calculations to 2 decimal places.)
e. A St. Falls subcontractor has offered to produce the parts for job no. 110 for a price of $8 per unit. Assume the St. Falls sales force has already committed to the bid price based on the calculations in part b. Should St. Falls buy the $8 per unit part from the subcontractor or continue to make the parts for job no. 110 itself?
f. Would your response to part e change if the St. Falls plant could use the facilities necessary to produce parts for job no. 110 for another job that could earn an incremental profit of $25,000?
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