"Don't tell me we've lost another bial exclaimed Janice Hudson, president of Prime Products Inc. "I'm afraid so," replied Doug Martin. the operations vice president. One of our competitors underbid us by about $12,000 on the Hastings job." Ujust can't figure it out, said Hudson. It seems we're ether too high to get the job or too low to make any money on half the jobs we bid. What's happened?" Prime Products manufactures specialized goods to customers' specifications and operates a job order costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labour cost. The following estimates were made at the beginning of the year: Direct Labour ufacturing overhad Cutting $ 315,000 5567,000 Department Machining Assembly $ 210,000 $ 420,000 $$40.000 $ 105,000 Total Plant $ 945,000 $1,512,000 Jobs require varying amounts of work in the three departments. The Hastings fob, for example, would have required manufacturing costs in the three departments as follows: Direct Dita nesutartiring overhead Cutting $20,000 5 11.500 2 Department Machining Assembly $1,900 57,600 $ 3,70 519,000 2 2 Total Plant $29,500 534,200 2 The company uses a plantwide overhead rate to apply manufacturing overhead cost to jobs. Required 1. Assuming the use of a plantwide overhead rate: Come the rate for the current year 6. Compute the rate for the current year b. Determine the amount of manufacturing overhead cost that would have been applied to the Hastings job. Manud ovestad con 2. Suppose that instead of using a plantwide overhead rate, the company had used a separate predetermined overhead rate in each department. Under these conditions: a. Compute the rate for each department for the current year, Predetermined Overhead Rate 56 Cutting department Machining department Assembly department % 36 Bad Help Save & Exit Sub ne me amount of manufacturing overed cost that would have been applied to the Hastings 3. This part of the question is not part of your Connect assignment. 4. Assume that it is customary in the industry to bdjobs at 140% of total manufacturing cost direct materials, direct labour, and applied ovetead What was the company's bid price on the Hastings job? What would the price e been if departmental overhead rates had been used to apply overhead cost? Prey 12 ! Next > b. What would the bid price have been If departmental overhead rates had been used to apply overhead cost? Company's bad price 5. At the end of the year, the company assembled the following actual cost data relating to all jobs worked on during the year Direct material Direct labour Manufacturing overhead Cutting $805,800 $340,000 $595,000 Department Machining Assembly $ 95,000 $430,000 $225,000 $356,000 $889,300 $ 96,300 Total Plant $1,330,000 $ 921,000 $1,580,680 a. Compute the underapplied or overapplied overhead for the year, assuming that a plantwide overhead rate is used. Direct Dirt labur Cutting $505,000 $10,000 $595.000 Machine $95.000 $325,000 59,00 Assembly $430,000 $356,000 16,00 Total Plan $1,310,000 $ 921,000 $1.580,60 a. Compute the underapplied or overapplied overhead for the year, assuming that a plantwide overhead rate is used, 2:53 b. Compute the unde applied or overapplied overhead for the year, assuming that departmental overhead rates are used, Maching Tutal Dan 1 of 2 Nov