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

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 ?

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_2

Step: 3

blur-text-image_3

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

Fundamental financial accounting concepts

Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward

8th edition

978-007802536, 9780077648831, 0078025362, 77648838, 978-0078025365

More Books

Students also viewed these Accounting questions