PROBLEM 2-16 Plantwide Predetermined Overhead Rates: Pricing LO2-1, L102-rthe company Landen Corporation uses a job-order made the following estimates Rates; Pricing LO2-1, LO2-2, LO2-3 costing system. At the beginning of the year, company Direct labor-hours required to support estimated production.1 140,000 70,000 Fixed manufacturing overhead cost Variable manufacturing overhead cost per direct labor-hour....... Variable manufacturing overhead cost per machine-hour ..$784,000 $2.00 $4.00 During the year, Job 550 was started and completed. The followving information is available with respect to this job: $175 $225 15 . . Direct labor-hours Required: I. 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 percentageof 200% of its total manufacturing cost, what selling price would it establish for Job 550? 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. 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 is right cost allocation base than direct labor-hours. as its only overhead cost allocation base what implications does this have as Job 550? about machine-hours being a more accurate overhead If the company continues to use direct labor-hours 3