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 | 145,000 |
Machine-hours required to support estimated production | 72,500 |
Fixed manufacturing overhead cost | 406,000 |
Variable manufacturing overhead cost per direct labor-hour | 4.40 |
Variable manufacturing overhead cost per machine-hour | 8.80 |
During the year, Job 550 was started and completed. The following information is available with respect to this job:
Direct materials | 183 |
Direct labor cost | 295 |
Direct labor-hours | 15 |
Machine-hours | 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.)
1a)) Plantwide overhead rate = (406000/145000+4.4) = 7.2 per DLH
1b) Total manufacturing cost = 183+295+15*7.2 = 586
1c) Total Selling price = 586+586*2 = 1758
2a) Plantwide overhead rate = (406000/72500+8.8) = 14.40 per MH
2b) Total manufacturing cost = 183+295+14.40*5 = 550
2c) Selling price = 550+550*2 = 1650
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made...
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 60,000 Machine-hours required to support estimated production 30,000 Fixed manufacturing overhead cost $ 180,000 Variable manufacturing overhead cost per direct labor-hour $ 1.00 Variable manufacturing overhead cost per machine-hour $ 2.00 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 213...
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 90,000 Machine-hours required to support estimated production 45,000 Fixed manufacturing overhead cost $ 252,000 Variable manufacturing overhead cost per direct labor-hour $ 2.40 Variable manufacturing overhead cost per machine-hour $ 4.80 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 236...
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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 60,000 Machine-hours required to support estimated production 30,000 Fixed manufacturing overhead cost $ 180,000 Variable manufacturing overhead cost per direct labor-hour $ 1.00 Variable manufacturing overhead cost per machine-hour $ 2.00 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 213...
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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 110,000 55,000 $308,000 $ 3.20 $ 6.40 During the year, Job 550 was started and completed. The following information is available with respect to this job: $ 187 $ 370 Direct...
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