Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Laden Corporation uses job - order costing. At the beginning of the year, it made the following estimates: Direct labor - hours required to support

Laden Corporation uses job-order costing. At the beginning of the year, it made the following estimates:
Direct labor-hours required to support estimated production 105,000.
Machine- hours reauired to support estimated production 52,500.
Fixed manufacturing overhead cost $294,000.
Vatiable manufacturing overhead cost per direct labor-hour $3.00
Variable manufacturing overhead cost per machine-hour $6.00
During the year, Job 550 was started and completed. The following information pertains to this job:
Direct materials $229
Direct labor cordt $293
Direct labor-hours 15
Machine- hours 5
Required:
1. Assume Landen has historically used a plantwide predetermined overhead rate with direct labor- hours as the allocation base. Under this approach: a.Compute the plantwide predetermined rate.
b. Compute the total manufacturing cost of Job 550.
c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
2. Assume Landen's controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach:
a. Compute the plantwide predetermined overhead rate.
b. Compute the total manufacturing cost of Job 550.
c. If Landen used a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Decision Making And Control

Authors: Jerold Zimmerman

5th Edition

0072975865, 978-0072975864

More Books

Students also viewed these Accounting questions