Please fix the boxes in red and show work. 
"Don't tell me we've lost another bid!" exclaimed Sandy Kovallas, president of Lenko Products, Inc. "I'm afraid so," replied Doug Martin, the operations vice president. "One of our competitors underbid us by about $10,100 on the Hastings job." "I just can't figure it out," said Kovallas. "It seems we're either too high to get the job or too low to make any money on half the jobs we bid anymore. What's happened?" Lenko Products manufactures specialized goods to customers' specifications and operates a job-order costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labor cost. The following estimates were made at the beginning of the year: Department Machining $ 220,000 $ 921,040 Cutting $ 313,000 $ 523,000 Direct labor Manufacturing overhead Assembly $ 409,000 $ 82,000 Total Plant $942,000 $1,526,040 Jobs require varying amounts of work in the three departments. The Hastings job, for example, would have required manufacturing costs in the three departments as follows: Department Machining $ 1,000 $ 1,700 Cutting $ 11,900 $ 6,600 Direct materials Direct labor Manufacturing overhead Assembly $ 5,600 $ 13,100 Total Plant $ 18,500 $ 21,400 The company uses a plantwide overhead rate to apply manufacturing overhead cost to jobs. Required: 1. Assuming the use of a plantwide overhead rate: a. Compute the rate for the current year. Answer is complete and correct. Predetermined overhead 162 % of direct labor rate cost b. Determine the amount of manufacturing overhead cost that would have been applied to the Hastings job. Answer is complete and correct. Manufacturing overhead cost 34,668 2. Suppose that instead of using a plantwide overhead rate, the company had used a separate predetermined overhead rate in each department. Under these conditions: a.Compute the rate for each department for the current year.(Round predetermined overhead percentages to the nearest whole percent.) Answer is complete and correct. Predetermined Overhead Rate Cutting department Machining department Assembly department 167 419 20 % b. Determine the amount of manufacturing overhead cost that would have been applied to the Hastings job. (Round your predetermined overhead percentages to the nearest whole percent.) Answer is complete but not entirely correct. Manufacturing overhead S20,772 cost 4. Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). a. What was the company's bid price on the Hastings job if the plantwide overhead rate had been used to apply overhead cost? Answer is complete and correct. Bid price with plant wide rate 111,852 b. What would the bid price have been if departmental overhead rates had been used to apply overhead cost? Answer is complete but not entirely correct. Bid price with departmental rate $91,007 5. At the end of the year, the company assembled the following actual cost data relating to all jobs worked on during the year: Direct materials Direct labor Manufacturing overhead Cutting $ 760,000 $ 318,000 $ 559,000 Department Machining $ 90,000 $ 210,000 $830,000 Assembly $ 410,000 $ 340,000 $ 92,000 Total Plant $1,260,000 $868,000 $1,481,000 a. Compute the underapplied or overapplied overhead for the year, assuming that a plantwide overhead rate is used. Answer is complete and correct. Underapplied overhead cost $ 74,840 b. Compute the underapplied or overapplied overhead for the year, assuming that departmental overhead rates are used. Answer is complete but not entirely correct. Cutting 26,304 % Machining Underapplied Overapplied Underapplied Underapplied overhead cost overhead cost overhead cost overhead cost Assembly 48,175 22,834 963 Total plant $
