$$I$$m sick of losing out on jobs,$$ Tony Stark, President and CEO of Stark Industries said, $$We$$ve lost the bid on the Avengers job by $$2,000.$ It seems we$$re bidding either too high or too low to make any money on half the jobs we bid.$$ He pauses to take a breath before continuing, $$Take the Wakanda job that we actually got. I$$m willing to bet we lost a solid $$3,000-$ $$5,000$ on that one.$$ You are an independent outside consultant, brought into help Stark Industries with job$-$order costing. Stark Industries manufactures a variety of products to customers$$ specifications and uses job$-$order costing. The company uses one predetermined overhead rate based on direct labor cost to apply manufacturing overhead $($assumed to be $100\%$ fixed$)$ to jobs. The following estimates were made at the beginning of the year:

Department Total Plant

Fabricating Machining Assembly

Manufacturing overhead $ $369,250$ $ $422,000$ $ $94,950$ $ $886,200$

Direct labor $ $211,000$ $ $105,500$ $ $316,500$ $ $633,000$

Jobs require varying amounts of work in the three department. The Avengers job, for example, would have required manufacturing costs in each of the three departments, as follows:

Department Total Plant

Fabricating Machining Assembly

Direct materials $ $4,100$ $ $400$ $ $2,500$ $ $7,000$

Direct labor $ $5,000$ $ $700$ $ $7,300$ $ $13,000$

Manufacturing overhead $????$

The Wakanda job, which involved intricate machining, on the other hand, involved the following costs:

Department Total Plant

Fabricating Machining Assembly

Direct materials $ $5,494$ $ $1,714$ $ $2,260$ $ $9,469$

Direct labor $ $6,700$ $ $3,000$ $ $6,600$ $ $16,300$

Manufacturing overhead $????$

Required $($Each requirement $($in Roman numerals$)$ worth $1$ point; $1$ point for turning it in; $5$ points possible$)$:

A$.$ Using the company$$s plantwide approach:

i$.$ Compute the plantwide predetermined overhead rate for the current year.

ii$.$ Determine the amount of manufacturing overhead cost applied to the Avengers job.

B$.$ Suppose that Stark Industries had used departmental overhead rates based on direct labor cost. Under these conditions:

iii. Compute the predetermined overhead rate for each department for the current year.

iv$.$ Determine the amount of manufacturing overhead to apply on the Avengers job.

C$.$ Assume it is customary in the industry to bid jobs at $150\%$ of total manufacturing cost $($cost plus $50\%$ markup$).$

v$.$ What was the company$$s bid price on the Avengers job using a single plantwide predetermined rate?

vi$.$ What would the bid price have been if departmental overhead rates had been used instead? Would Stark have gotten the job at that price?

D$.$ Regarding the Wakanda job $($recall the company bids jobs at $150\%$ of total cost$)$:

vii. How much did the company charge using a single plantwide rate?

viii. How much would they have charged using multiple department rates?