question 5 1a-1c

Problem 2-16 (Algo) 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 During the year, Job 550 was started and completed. The following Information is available with respect to this job: $ 195 $ 288 Direct materials Direct labor cost Direct labor-hours Machine-hours 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? 2. 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. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? (Round your intermediate calculations to 2 decimal places. Round your Predetermined Overhead Rate answers to 2 decimal places and all other answers to the nearest whole dollar.) 1. Direct labor-hours: 1a. Predetermined overhead rate 1b. Total manufacturing cost of Job 550 1c. Selling price 2. Machine-hours: 2a. Predetermined overhead rate 2b. Total manufacturing cost of Job 550 2c. Selling price 150,000 75,000 $ 420,000 $4.60 $9.20 $ $ S I per DLH 14.80 per MH 557 1,671