ding Heading 2 Title Subtitle Paragraph Don't tell me we've lost another bid! excaimed Sandy Kovallas, president of Lenko Products,Inc. "T'm afraid so." replied Doug Martin, the operations vice president. "One of our competitorsunderbid us by about $10,000 on the Hastings job." "I just can't figure it out," said Kovallas. "Itseems we're either too high to get the job or too low to make any money on half the jobs we bidanymore. What's happened? Lenko Products manufactures specialized goods to customers' specifications and operatesa job-order costing system. Manufacturing overhead cost is applied to jobs on the basis of directlabor cost. The following estimates were made at the beginning of the year Department Machining Assembly Total Plant $400,000 Cutting Direct labor 300 $900,000 Manufacturing overhead 8.0 800 $1,440,000 Jobs require varying amounts of work in the three departments. The Hastings job, for example would have required manufacturing costs in the three departments as follows: Department Cutting Machining $900 AssemblyTotal Plant $12,000 $5,600 $18,500 Direct materials Direct labor Manufacturing overhead 700 13,000 $21,200 United Kingdom) ding Heading 2 Title Subtitle Paragraph Don't tell me we've lost another bid! excaimed Sandy Kovallas, president of Lenko Products,Inc. "T'm afraid so." replied Doug Martin, the operations vice president. "One of our competitorsunderbid us by about $10,000 on the Hastings job." "I just can't figure it out," said Kovallas. "Itseems we're either too high to get the job or too low to make any money on half the jobs we bidanymore. What's happened? Lenko Products manufactures specialized goods to customers' specifications and operatesa job-order costing system. Manufacturing overhead cost is applied to jobs on the basis of directlabor cost. The following estimates were made at the beginning of the year Department Machining Assembly Total Plant $400,000 Cutting Direct labor 300 $900,000 Manufacturing overhead 8.0 800 $1,440,000 Jobs require varying amounts of work in the three departments. The Hastings job, for example would have required manufacturing costs in the three departments as follows: Department Cutting Machining $900 AssemblyTotal Plant $12,000 $5,600 $18,500 Direct materials Direct labor Manufacturing overhead 700 13,000 $21,200 United Kingdom)