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The Gilster Company, a machine tooling firm, has several plants. One plant, located in St . Cloud, Minnesota, uses a job order costing system for
The Gilster Company, a machine tooling firm, has several plants. One plant, located in St Cloud, Minnesota, uses a job order costing system for its batch production processes. The St Cloud plant has two departments through which most jobs pass. Plantwide overhead, which includes the plant managers salary, accounting personnel, cafeteria, and human resources, is budgeted at $ During the past year, actual plantwide overhead was $ Each departments overhead consists primarily of depreciation and other machinerelated expenses. Selected budgeted and actual data from the St Cloud plant for the past year are as follows.For the coming year, the accountants at the St Cloud plant are in the process of helping the sales force create bids for several jobs. Projected data pertaining only to job no are as follows.Required:a Assume the St Cloud plant uses a single plantwide overhead rate to assign all overhead plantwide and department costs to jobs. Use expected total direct labor hours to compute the overhead rate.a What is the expected cost per unit produced for job nob Find the plant wide overhead rate by using expected machine hours.b Find the department overhead rate using expected machine hours for Department A and Department Bb Calculate the projected manufacturing costs per unit for job using the three separate rates computed in b and bc The sales policy at the St Cloud plant dictates that job bids be calculated by adding percent to total manufacturing costs. What would be the bid for job no using the overhead rate from part ac The sales policy at the St Cloud plant dictates that job bids be calculated by adding percent to total manufacturing costs. What would be the bid for job no using the overhead rate from part bc Which of the overhead allocation methods would you recommend?
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