PROBLEM 2-16 Plantwide Predetermined Overhead Rates; Pricing(\$) LO2-1, (G) LO2-2, (G) LO2-3 Landen Corporation uses a job-order corting sytem. At tbe beginning of the jear, the company made the following estimates: During the year, Job 550 was started and completed. The following information is available with respect to this job: Required: 1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach: 2. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550 . c. If Landen uses a markop percentage of 200% of its total manufacturing cort, what selling price would it establith for Job 550 ? 2. Assume that Landen's controller believes that machine hours is a better allocation base than direct laborbours. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cort 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 ? 3. Assume that Landen's controller is right about machine-hours being a more accurate overhead cost allocation base than direct laboshours. If the company continues to use direct labor-hours as its only orerhead cost allocation base what implications does this have for pricing jobs such as Job 550 ? Page 86