"Don't tell me we've lost another bid 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 $11,000 on the Hastings job.just can't figure it out," sad Hudson, it seems we're either 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 Oirect labor Hanufacturing over Guttie 100,000 $30,000 $100,000,000 Machines Total Plants 550.000 $16,00 102,000 $1,450,000 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: Det Madini $ 3,00 50,400 $2,500 Cutting $ 15,200 $5.500 Direct material Direct Tabour Manufacturing overhead 22,000 $ 26,400 The company uses a plantwide overhead rate to apply manufacturing overhead cost to jobs Required: 1. Assuming the use of a of a plantide overhead rate a. Compute the rate for the current year 1. Assurning the use of a plantwide overhead rates 21 a. Compute the rate for the current year b. Determine the amount of manufacturing overhead cost that would have been applied to the Hastings job 2. Suppose that instead of using a plantwide overhead rate the company had used a parte predetermined overhead tate in each department Under these conditions - Compute the rate for each department for the current year Predetermined Overhead Rate Cutting department Machangiaren Assembly department SESSMENT 10 Save & ENIE b. Determine the amount of manufacturing overhead cost that would have been applied to the Hastings job 3. Not available in Connect 4. Assume that it is customary in the industry to bid Jobs at 150% of total manufacturing cost direct materials, direct labous, and applied overhead) a. What was the company's bid price on the Hastings job? Company's his poce b. What would the bid price have been if departmental overhead rates had been used to apply overhead coste Comantido MEN Sve SE 3. At the end of the year, the company assembled the following actua cost data relating to all jobs worked on during the years Mutluline 5770.000 . 3511,000 $5,00 Direct salarial De ser Manufacturing overhead 5413, . 13,571, a. Compute the underappled or overapplied overhead for the your insuming that a plantwide overhead rate is used b. Compute the underapplied or ove applied overhead for the year, assuming that departmental overhead rates are used, Cutting Machining
