Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates:
Direct labor-hours required to support estimated production 120,000
Machine-hours required to support estimated production 60,000
Fixed manufacturing overhead cost $ 336,000
Variable manufacturing overhead cost per direct labor-hour $ 3.60
Variable manufacturing overhead cost per machine-hour $ 7.20
During the year, Job 550 was started and completed. The following information is available with respect to this job:
Direct materials $ 206
Direct labor cost $ 238
Direct labor-hours 15
Machine-hours 5
Required:
1. Assume that 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 overhead 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 that Landens 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 uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
(Round your intermediate calculations to 2 decimal places. Round your "Predetermined Overhead Rate" answers to 2 decimal places and all other answers to the nearest whole dollar.)
image text in transcribed
e hearest whole dollar.) 1 Direct labor-hours: a. Predetermined overhead rate per DLH b. Total manufacturing cost of Job 550 Selling price C. 2 Machine-hours: a Predetermined overhead rate per MH b. Total manufacturing cost of Job 550 Selling price C

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

More Books

Students also viewed these Accounting questions

Question

List out some inventory management techniques.

Answered: 1 week ago

Question

8. Describe how cultural spaces are formed.

Answered: 1 week ago