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Luthan Company uses a plantwide predetermined overhead rate of $22.60 per direct la bor-hou r. This predetermined rate was based on a cost formula that
Luthan Company uses a plantwide predetermined overhead rate of $22.60 per direct la bor-hou r. This predetermined rate was based on a cost formula that estimated $271200 of total manufacturing overhead cost for an estimated activity level of 12.000 direct labor- hours. The company incurred actual total manufacturing overhead cost of $268000 and 10,400 total direct labor-hours during the period. Required: Determine the amount of manufacturing overhead cost that would have been applied to all jobs during the period. Landen Corporation uses ajob-order costing system. At the beginning of the year. the company made the following estimates: Direct labor-hours required to support estimated production 139,999 Machine-hours required to support estimated production 65,999 Fixed manufacturing overhead cost S 364,999 Variable manufacturing overhead cost per direct labor-hour S 4.99 Variable manufacturing overhead cost per machine-hour S 9.99 During the year. Job 550 was started and completed. The following Information is available with respect to this job: Direct materials 5 253 Direct labor cost S 349 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 predetermlned overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 20096 of Its total manufacturing cost. what selling prlce would It establish for Job 550? 2. Assume that Landen's controller believes that machine-hours is a better allocatlon base than direct labor-hours. Under this approach: a. Compute the plantwide predetermlned 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 prlce would It establish for Job 550? (Round your intermediate calculations to 2 decimal places. Round your Predetermlned Overhead Rate answers to 2 decimal places and all other answers to the nearest whole dollar.) 1. Direct labor-hours: 1a. Predetermined overhead rate per DLH 1b. Total manufacturing cost of Job 550 1c. Selling price 2. Machine-hours: 2a. Predetermined overhead rate per MH 2b. Total manufacturing cost of Job 550 2c. Selling price
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