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Jasper Company, a machine tooling firm, has several plants. One plant, located in Saint Cloud, Minnesota, uses a job order costing system for its batch

Jasper Company, a machine tooling firm, has several plants. One plant, located in Saint Cloud, Minnesota, uses a job order costing system for its batch production processes. The Saint Cloud plant has two departments through which most jobs pass. Plantwide overhead, which includes the plant managers salary, accounting personnel, cafeteria, and human resources, is budgeted at $360,000. During the past year, actual plantwide overhead was $350,000. Each departments overhead consists primarily of depreciation and other machine-related expenses. Selected budgeted and actual data from the Saint Cloud plant for the past year are as follows:
Department A Department B
Budgeted department overhead (excludes plantwide overhead) $ 147,000 $ 442,000
Actual department overhead 155,000462,000
Expected total activity:
Direct labor hours 48,00025,000
Machine-hours 14,00052,000
Actual activity:
Direct labor hours 49,00023,800
Machine-hours 14,80054,000
For the coming year, the accountants at the Saint Cloud plant are in the process of helping the salesforce create bids for several jobs. Projected data pertaining only to job number 110 are as follows:
Direct materials $ 21,200
Direct labor cost:
Department A (3,000 hours)45,000
Department B (1,100 hours)11,200
Machine-hours projected:
Department A 220
Department B 1,200
Units produced 14,000
c-1. The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 26 percent to total manufacturing costs. What would be the bid for job number 110 using an overhead rate of $13.00 per direct labor hour?
c-2. The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 26 percent to total manufacturing costs. What would be the bid for job number 110 using the following three separate overhead rates based on machine hours?
Plantwide rate of $5.45 per machine hour
Department A overhead rate of $10.50 per machine hour
Department B overhead rate of $8.50 per machine hour
c-3. Which of the overhead allocation methods would you recommend?

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