Question
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
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 | 115,000 |
Machine hours required to support estimated production | 57,500 |
fixed manufacturing overhead | $322,000 |
Variable manufacturing overhead cost per direct labor-hour | $ 3.40 |
Variable manufacturing overhead cost per machine-hour | $ 6.80 |
During the year, Job 550 was started and completed. The following information is available with respect to this job:
Direct material | $252 |
Direct labor cost | $370 |
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.)
This chart below is what I need help filling out
1. | Direct Labor Hours: | ||
A. | Predetermined overhead rate | ? | Per DHL |
B. | Total Manufacturing Cost of job 550 | ? | |
C. | Selling Price | ? | |
2. | Machine Hours | ||
A. | Predetermined overhead rate | ? | Per MH |
B. | Total manufacturing cost of job 550 | ? | |
C. | Selling price | ? |
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