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Required information [The following information applies to the questions displayed below.] Landis Company uses a job-order costing system with a predetermined plantwide overhead rate based
Required information [The following information applies to the questions displayed below.] Landis Company uses a job-order costing system with a predetermined plantwide overhead rate based on direct labor-hours. In an effort to improve its ability to measure job profitability and make decisions, the company is considering allocating some of its overhead costs, such as electrical costs, based on machine- hours instead of direct labor-hours. To further explore the potential benefits of this approach, the company has gathered the following eight weeks of actual (not estimated) data with respect to its electrical costs: Machine- Hours Direct Labor-Hours Electrical Costs Week 1 7,700 8,910 $ 76,200 Week 2 8,900 8,920 83,800 Week 3 8,600 8,870 81,000 Week 4 8,100 8,840 80,800 Week 5 7,600 8,990 79,400 Week 6 7,100 8,940 70,700 Week 7 5,500 8,870 61,500 Week 8 6,800 8,910 73,900 Total 60,300 71,250 $607,300 Using the data above, the company translated these actual amounts into annual estimates as follows: Machine Hours Direct Labor- Electrical Hours Costs Total for eight weeks (a) 60,300 71,250 $ 607,300 52 weeks 8 weeks (b) Annual estimate (a) x 6.5 6.5 6.5 391,950 463,125 $3,947,450 (b) Click here to download the Excel template, which you will use to answer Requirements 4.5 and 6. Click here for a brief tutorial on Regression Analysis in Excel. 3. Assume that the company plans to bid on Job Q400 that would require 270 direct labor-hours and 350 machine- hours. a. How much electrical cost would be allocated to Job Q400 using the estimated electrical cost per direct labor-hour from requirement 1? b. How much electrical cost would be allocated to Job Q400 using the estimated electrical cost per machine-hour from requirement 2? The electrical cost allocated to Job 3-a. Q400 is 3-b. The electrical cost allocated to Job Q400 is
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