problem 2-16

a connect PRO PROBLEM 2-16 Plantwide Predetermined Overhead Rates; Pricing LO2-1, LO2-2, LO2-3 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.. Machine-hours required to support estimated production . .. Fixed manufacturing overhead cost Variable manufacturing overhead cost per direct labor-hour Variable manufacturing overhead cost per machine-hour........ 140,000 70,000 $784,000 $2.00 $4.00 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials . .. Direct labor cost . Direct labor-hours Machine-hours.. $175 $225 15 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? Assume that Landen's 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. 2. Chapter 2 C. If I anden uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? Assume that Landen's controller is right ab allocation base than direct labor-hours. If overhead cost allocation base what implications does this have for pricing job out machine-hours being a more accurate overhead cost the company continues to use direct labor-hours as its only 3. s such as Job 550? PROBLEM 2-17 Plantwide and Departmental Predetermined Overhead Rates Application LO2-1, LO2-2 Wilminston Company has two manufacturing departments-Assembly and Fabrication. It considers al