"Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $2,000. It seems we're 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 uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Department Fabricating Machining Assembly Total Plant Manufacturing Overhead Direct $ 345,000 $ 385,000 $ 94,000 $ 824,000 Labor $ 210,000 $ 83,000 $ 294,000 $ 587,000 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 Fabricating Machining Assembly Total Plant Direct Materials S 2,900 $ 190 $ 1,500 $ 4,590 Direct Labor $ 2,700 $ 470 $ 6,400 $ 9,570 Manufacturing Overhead ? ? S Teledex Company believes its technology and human capital are industry leading and does not understand why its pricing is not competitive in the market. The Company has hired your consulting firm to analyze their job-order costing system. Prepare a memo to the president of Teledex, David Wilson explaining how the Kooper job was priced using the company's current method of using a plantwide predetermined overhead rate and how it could be priced using departmental predetermined overhead rates. Be sure to address the following: o The predetermined overhead rate using both methods. o Which method provides a more accurate cost for a job and why. o Provide tables that show the costs of the Koopers job using both methods. o Assuming industry standard is to bid jobs at 150% of total manufacturing costs, what did Teledex bid on the Koopers job and what the bid could have been using the departments PDOH to apply overhead costs. (Example: if costs were $100 then price would be $150).