Ch 4 #3

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates Direct labor-hours required to support estimated production Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per direct labor-hour Variable manufacturing overhead cost per machine-hour 155, 000 77,500 $465, 000 $ 4.80 $ 9.60 During the year, Job 550 was started and completed. The following information is available with respect to this job Direct materials Direct labor cost Direct labor-hours Machine-hours $ 210 $ 349 Required: 1. Assume that 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 lf Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? 2. Assume that 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? (Round your intermediate calculations to 2 decimal places. Round your Predetermined Overhead Rate answers to 2 decimal places and all other answers to the nearest whole dollar.) 1. Direct labor-hours: Predetermined overhead rate Total manufacturing cost of Job 550 Selling price per DLH 2. Machine-hours Predetermined overhead rate Total manufacturing cost of Job 550 Selling price r MH