"Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $3,000. 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 $ 379,750 $434,800 $ 97,650 $911,400 Direct labor $ 217,800 $ 188,00 $325,500 $ 651,000 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: Direct materials Direct labor Manufacturing overhead Fabricating $4,70e $ 6,200 Department Machining $300 $ 600 ? Assembly $ 3,100 $ 7,900 > Total Plant $ 8,100 $14,700 Required: 1. Using the company's plantwide approach a. Compute the plantwide predetermined rate for the current year. b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Under these conditions: a. Compute the predetermined overhead rate for each department for the current year b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job 4. Assume that it is customary in the industry to bidjobs at 150% of total manufacturing cost direct materials, direct labor, and applied a What was the company's bid price on the Koopers job using a plantwide predetermined overhead rate? b. What would the bid price have been it departmental predetermined overhead rates had been used to apply overhead cost? overhead Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Req 28 Reg 4A Req 4B Using the company's plant wide approach. Compute the plant wide predetermined rate for the current year. Predetermined overhead rate % of direct labor cost Reg 18 > Complete this question by entering your answers in the tabs below. Reg 1A Rece Reg 2A Reg 28 Reg 4A Reg 48 Using the company's plant wide approach. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost applied ( Req 1A Req 2A > Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Rea BA Reg 28 Reg 4 Reg 4B Suppose that instead of using a plant wide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Compute the predetermined overhead rate for each department for the current year. Predetermined Overhead Rate Fabricating department % Machining department % Assembly department 96 of direct labor cost of direct labor cost of direct labor cost Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Req 2 Reg 4A Reg 48 Suppose that instead of using a plant wide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost applied Complete this question by entering your answers in the tabs below. Reg 28 Reg 4A Req Reg 1A Reg 1B Reg 2A 2209 48 Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead cost? Manufacturing overhead cost applied Reg 4A
