PLEASE SHOW WORK!

Blast it! said David Wilson, president of Teledex Company. Weve just lost the bid on the Koopers job by $3,000. It seems were 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:

	Department			Total Plant
	Fabricating	Machining	Assembly
Manufacturing overhead	$ 376,250	$ 430,000	$ 96,750	$ 903,000
Direct labor	$ 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:

	Department			Total Plant
	Fabricating	Machining	Assembly
Direct materials	$ 4,500	$ 500	$ 2,900	$ 7,900
Direct labor	$ 5,800	$ 800	$ 7,700	$ 14,300
Manufacturing overhead	?	?	?	?

Required:

Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Under these conditions:

Compute the predetermined overhead rate for each department for the current year.

Predetermined Overhead Rate \begin{tabular}{|l|l|l|l} \hline Fabricating department & % & of direct labor cost \\ \hline Machining department & & % & of direct labor cost \\ \hline Assembly department & & % & of direct labor cost \\ \hline \end{tabular}