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 $250,000. During the past year, actual plantwide overhead was $230,000. 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:
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:
Comprehensive Problem 5 (Algo) Part c
c-1. The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 32 percent to total manufacturing costs. What would be the bid for job number 110 using an overhead rate of $12.72 per unit?
c-2. The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 32 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 $3.85 per machine hour
Department A overhead rate of $6.00 per machine hour
Department B overhead rate of $7.00 per machine hour
f. A Saint Cloud subcontractor has offered to produce the parts for job number 110 for a price of $6 per unit. Assume the Saint Cloud sales force has already committed to the bid price of $72,403.50. Compute incremental cost (benefit) to make if the Saint Cloud plant could use the facilities necessary to produce parts for job number 110 for another job that could earn an incremental profit of $19,000? Assume the Saint Cloud plant uses three separate overhead rates to assign overhead costs to jobs based on machine hours.
\begin{tabular}{lrr} Budgeted department overhead & Department A & Department B \\ (excludes plantwide overhead) & $108,000 & $329,000 \\ Actual department overhead & 120,000 & 344,000 \\ Expected total activity: & 44,000 & 10,000 \\ Direct labor hours & 18,000 & 47,000 \\ Machine-hours & 45,500 & 9,500 \\ Actual act ivity: & 18,500 & 49,000 \end{tabular} \begin{tabular}{lrr} Budgeted department overhead & Department A & Department B \\ (excludes plantwide overhead) & $108,000 & $329,000 \\ Actual department overhead & 120,000 & 344,000 \\ Expected total activity: & 44,000 & 10,000 \\ Direct labor hours & 18,000 & 47,000 \\ Machine-hours & 45,500 & 9,500 \\ Actual act ivity: & 18,500 & 49,000 \end{tabular} Direct materials Direct labor cost: Department A (2,200 hours ) Department B (1,200 hours) Machine-hours projected: Department A Department B Units produced $18,500 33,000 6,800 6,800 110 1,200 14,000 \begin{tabular}{lrr} Budgeted department overhead & Department A & Department B \\ (excludes plantwide overhead) & $108,000 & $329,000 \\ Actual department overhead & 120,000 & 344,000 \\ Expected total activity: & 44,000 & 10,000 \\ Direct labor hours & 18,000 & 47,000 \\ Machine-hours & 45,500 & 9,500 \\ Actual act ivity: & 18,500 & 49,000 \end{tabular} The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 32 percent to total manufacturing costs. What would be the bid for job number 110 using an overhead rate of $12.72 per unit? Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. \begin{tabular}{|l|lr|} \hline Incremental profit earned by producing the other job & $ & 19,000 \\ \hline Incremental cost of buying the parts from the subcontractor & $ & 48,860 \\ \hline Increase in total profits & $ & 29,860 \\ \hline \end{tabular} Direct materials Direct labor cost: Department A (2,200 hours ) Department B (1,200 hours) Machine-hours projected: Department A Department B Units produced $18,500 33,000 6,800 6,800 110 1,200 14,000 Direct materials Direct labor cost: Department A (2,200 hours ) Department B (1,200 hours) Machine-hours projected: Department A Department B Units produced $18,500 33,000 6,800 6,800 110 1,200 14,000 The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 32 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 $3.85 per machine hour Department A overhead rate of $6.00 per machine hour Department B overhead rate of $7.00 per machine hour Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. \begin{tabular}{lrr} Budgeted department overhead & Department A & Department B \\ (excludes plantwide overhead) & $108,000 & $329,000 \\ Actual department overhead & 120,000 & 344,000 \\ Expected total activity: & 44,000 & 10,000 \\ Direct labor hours & 18,000 & 47,000 \\ Machine-hours & 45,500 & 9,500 \\ Actual act ivity: & 18,500 & 49,000 \end{tabular} \begin{tabular}{lrr} Budgeted department overhead & Department A & Department B \\ (excludes plantwide overhead) & $108,000 & $329,000 \\ Actual department overhead & 120,000 & 344,000 \\ Expected total activity: & 44,000 & 10,000 \\ Direct labor hours & 18,000 & 47,000 \\ Machine-hours & 45,500 & 9,500 \\ Actual act ivity: & 18,500 & 49,000 \end{tabular} Direct materials Direct labor cost: Department A (2,200 hours ) Department B (1,200 hours) Machine-hours projected: Department A Department B Units produced $18,500 33,000 6,800 6,800 110 1,200 14,000 \begin{tabular}{lrr} Budgeted department overhead & Department A & Department B \\ (excludes plantwide overhead) & $108,000 & $329,000 \\ Actual department overhead & 120,000 & 344,000 \\ Expected total activity: & 44,000 & 10,000 \\ Direct labor hours & 18,000 & 47,000 \\ Machine-hours & 45,500 & 9,500 \\ Actual act ivity: & 18,500 & 49,000 \end{tabular} The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 32 percent to total manufacturing costs. What would be the bid for job number 110 using an overhead rate of $12.72 per unit? Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount. \begin{tabular}{|l|lr|} \hline Incremental profit earned by producing the other job & $ & 19,000 \\ \hline Incremental cost of buying the parts from the subcontractor & $ & 48,860 \\ \hline Increase in total profits & $ & 29,860 \\ \hline \end{tabular} Direct materials Direct labor cost: Department A (2,200 hours ) Department B (1,200 hours) Machine-hours projected: Department A Department B Units produced $18,500 33,000 6,800 6,800 110 1,200 14,000 Direct materials Direct labor cost: Department A (2,200 hours ) Department B (1,200 hours) Machine-hours projected: Department A Department B Units produced $18,500 33,000 6,800 6,800 110 1,200 14,000 The sales policy at the Saint Cloud plant dictates that job bids be calculated by adding 32 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 $3.85 per machine hour Department A overhead rate of $6.00 per machine hour Department B overhead rate of $7.00 per machine hour Note: Round your intermediate calculations to 2 decimal places and final answer to the nearest whole dollar amount
