Comprehensive Problem $5($Algo$)$

$[$The following information applies to the questions displayed below.$]$

The Gilster Company, a machine tooling firm, has several plants. One plant, located in St$.$ Cloud, Minnesota, uses a job

order costing system for its batch production processes. The St$.$ Cloud plant has two departments through which most

jobs pass. Plant$-$wide overhead, which includes the plant manager's salary, accounting personnel, cafeteria, and human

resources, is budgeted at $$200,000.$ During the past year, actual plantwide overhead was $$187,000.$ Each department's

overhead consists primarily of depreciation and other machine$-$related expenses. Selected budgeted and actual data from

the St$.$ Cloud plant for the past year are as follows.

For the coming year, the accountants at the St$.$ Cloud plant are in the process of helping the sales force create bids for

several jobs. Projected data pertaining only to job no$.110$ are as follows.

Comprehensive Problem $5($Algo$)$ Part a

Required:

a$-1.$ Assume the St$.$ Cloud plant uses a single plantwide overhead rate to assign all overhead $($plantwide and department$)$ costs to jobs.

Use expected total direct labor hours to compute the overhead rate.

a$-2.$ What is the expected cost per unit produced for job no$.110?$

Comprehensive Problem $5($Algo$)$ Part b

Assume the St$.$ Cloud plant uses three separate overhead rates to assign overhead costs to jobs.

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$-3.$ Calculate the projected manufacturing costs per unit for job $110$ using the three separate rates computed in b$-1$ and b$-2.$

Comprehensive Problem $5($Algo$)$ Part c

c$-1.$ The sales policy at the St$.$ Cloud plant dictates that job bids be calculated by adding $28$ 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 the St$.$ Cloud plant dictates that job bids be calculated by adding $28$ percent to total manufacturing costs. What

would be the bid for job no$.110$ using the overhead rate from part b$?$

Comprehensive Problem $5($Algo$)$ Part d

d$.$ Compute the under$-$ or overapplied overhead for the St$.$ Cloud plant for the year. $($Round your intermediate calculations to $2$

decimal places.$)$

Comprehensive Problem $5($Algo$)$ Part e

e$.$ A St$.$ Cloud subcontractor has offered to produce the parts for job no$.110$ for a price of $$7$ per unit. Assume the St$.$ Cloud sales force

has already committed to the bid price based on the calculations in part b$.$ Should the St$.$ Cloud plant buy the $$7$ per unit part from the

subcontractor or continue to make the parts for job no$.110$ itself?

Continue to make the part

Buy part from the subcontractor

Comprehensive Problem $5($Algo$)$ Part f

f$.$ Would your response to part e change if the St$.$ Cloud plant could use the facilities necessary to produce parts for job no$.110$ for

another job that could earn an incremental profit of $$19,000?$