PROBLEM 2-16 Plantwide Predetermined Overhead Rates: Pricing L02-12.402-2.L02-30 Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates 70,000 Direct labor-hours required to support estimated production 140,000 Machine-hours required to support estimated production Fixed manufacturing overhead cost $784,000 Variable manufacturing overhead cost per direct labor-hour Variable manufacturing overhead cost per machine hour During the yeah Mob 550 was started and completed. The following information is available with respect to this job 5200 $400 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 bute. Under this approach a. Compute the plantwide predetermined overhead rate b Compute the total manufacturing cost of Job 550 e If Landen mes a markup percentage of 200% of its total manufacturing cont, what selling price would it establish for Job 5502 2. Assume that Landen's controller believes that machine-hours is a better allocation base than direct labor hours Under this approach: . Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job SSO If Landen uues a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 5509 3. Assume that Landen's controller is right about machine hours being a more accurate overhead cott allocation base than direct labor hours. If the company continues to use direct labor hours as its only overhead cost allocation base what implications does this have for pricing jobs such as Job SSO