Blast it! said David Wilson, president of Teledex Company. Weve just lost the bid on the Koopers job by $2,000. It seems were either too
Blast it! said David Wilson, president of Teledex Company. Weve just lost the bid on the Koopers job by $2,000. It seems were either too high to get the job or too low to make any money on half the jobs we bid. |
Teledex Company manufactures products to customers specifications and operates a joborder costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labor cost. The following estimates were made at the beginning of the year: |
Department | ||||||||
| ||||||||
Fabricating | Machining | Assembly | Total Plant | |||||
Direct labor | $ | 200,000 | $ | 100,000 | $ | 300,000 | $ | 600,000 |
Manufacturing overhead | $ | 350,000 | $ | 400,000 | $ | 90,000 | $ | 840,000 |
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Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: |
Department | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fabricating | Machining | Assembly | Total Plant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct materials | $ | 3,000 | $ | 200 | $ | 1,400 | $ | 4,600 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct labor | $ | 2,800 | $ | 500 | $ | 6,200 | $ | 9,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manufacturing overhead | ? | ? | ? | ? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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