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Plantwide versus Departmental Overhead Rates: PricingFirst- Use the correct answers to write the case study report. Answer each question as if you were the
Plantwide versus Departmental Overhead Rates: PricingFirst- Use the correct answers to write the case study report. Answer each question as if you were the managerial accountant for the Teledex Company and are presenting to the company president as indicated in the case study. For each answer explain the terminology and concepts used. For example, in #1 rather than just give the predetermined overhead rate, explain the calculation - this is a professional report from a managerial accountant to the company president.Use outside sources when necessary BUT MAKE SURE YOU CITE THEM!When giving a recommendation, back it up with numbers. Make sure you address the original dilemma - lost bids. This particular answer should be managerial accounting report to the company president. "Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $3,000. It seems we're either too high to get the job or too low to make any money on half the jobs we bid." Teledex Company manufactures products to customers' specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Manufacturing overhead Direct labor Fabricating Department Machining $ 376,250 $430,000 Assembly $ 96,750 $ Total Plant 903,000 $ 215,000 $ 107,500 $ 322,500 $ 645,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Direct materials Fabricating $ 4,500 Department Machining $ 500 Assembly Total Plant $ 2,900 Direct labor $ 5,800 $ 800 $7,700 Manufacturing overhead ? ? $ 7,900 $14,300 ?
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