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Use the table to answer the questions. Blast it said David Wison, president of Teledex Company. We've just lost the bid on the Koopers job
Use the table to answer the questions.
"Blast it" said David Wison, president of Teledex Company. "We've just lost the bid on the Koopers job by $3,000. It seems we're either too high to get the job or too low to make any money on half the jobs we bid." Teledex Company manufactures products to customers' spocifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Required: 1. Using the company's plantwide opproach: a. Compute the plantwide predetermined rate for the current year b. Determine the amount of manufocturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using o plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct lobor cost. Under these conditions: a. Compute the predetermined overheed rate for each department for the current year. b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 4. Assume that it is customary in the industry to bid job5 at 150\% of total manufocturing cost (direct materials, direct labor, and applied overhead). a. What was the company's bid price on the Koopers job using a plontwide predetermined overhead rate? D. What would the bid price have been if departmental predotermined overhead rates had been used to apply overhead cost? "Blast it" said David Wison, president of Teledex Company. "We've just lost the bid on the Koopers job by $3,000. It seems we're either too high to get the job or too low to make any money on half the jobs we bid." Teledex Company manufactures products to customers' spocifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year: Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Required: 1. Using the company's plantwide opproach: a. Compute the plantwide predetermined rate for the current year b. Determine the amount of manufocturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using o plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct lobor cost. Under these conditions: a. Compute the predetermined overheed rate for each department for the current year. b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 4. Assume that it is customary in the industry to bid job5 at 150\% of total manufocturing cost (direct materials, direct labor, and applied overhead). a. What was the company's bid price on the Koopers job using a plontwide predetermined overhead rate? D. What would the bid price have been if departmental predotermined overhead rates had been used to apply overhead cost Step by Step Solution
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