Using the company's plantwide approach: a. Compute the plantwide predetermined rate for the current year. b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Under these conditions: a.Compute the predetermined overhead 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 jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). a.What was the company’s bid price on the Koopers job using a plantwide predetermined overhead rate? b.What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead cost?
a.
Total Plant Manufacturing overhead = $852,600
Total Plant Direct Labor Cost = $609,000
Overhead rate = 852,600 X 609,000 = $1.4 per labor cost dollar
b.
Rate = $1.4
Total Labor Cost in Koopers job = $10,400
Overhead cost = 10,400 X 1.4 = $14,560
2.
Fabricating | Machining | Assembly | Total | ||
Manufacturing Overhead | A | $ 3,55,250 | $ 4,06,000 | $ 91,350 | $ 8,52,600 |
Direct labor | B | $ 2,03,000 | $ 1,01,500 | $ 3,04,500 | $ 6,09,000 |
Rate | A / B | $ 1.75 | $ 4.00 | $ 0.30 | |
Fabricating | Machining | Assembly | Total | ||
Direct Material | $ 3,300 | $ 200 | $ 1,700 | $ 5,200 | |
Direct labor | $ 3,400 | $ 500 | $ 6,500 | $ 10,400 | |
Overhead | $ 5,950 | $ 2,000 | $ 1,950 | $ 9,900 | |
(1.75 X 3,400) | (4 X 500) | (0.3 X 6,500) | $ 25,500 | ||
4.
Fabricating | Machining | Assembly | Total | ||
Direct Material | $ 3,300 | $ 200 | $ 1,700 | $ 5,200 | |
Direct labor | $ 3,400 | $ 500 | $ 6,500 | $ 10,400 | |
Overhead | $ 4,760 | $ 700 | $ 9,100 | $ 14,560 | |
(1.4 X 3,400) | (1.4 X 500) | (1.4 X 6,500) | $ 30,160 | ||
BID Price | 30,160 X 1.5 | $ 45,240.0 | |||
Fabricating | Machining | Assembly | Total | ||
Direct Material | $ 3,300 | $ 200 | $ 1,700 | $ 5,200 | |
Direct labor | $ 3,400 | $ 500 | $ 6,500 | $ 10,400 | |
Overhead | $ 5,950 | $ 2,000 | $ 1,950 | $ 9,900 | |
(1.75 X 3,400) | (4 X 500) | (0.3 X 6,500) | $ 25,500 | ||
BID Price | 25,500 X 1.5 | $ 38,250.0 |
Using the company's plantwide approach: a. Compute the plantwide predetermined rate for the current year. b. Determine the amount of manufacturing overhead cost that would have been applied to th...
3. Award: 30.00 points “Blast it!” said David Wilson, 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’ specifications 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...
“Blast it!" said David Wilson, 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' specifications and operates a job order costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labor cost. The following estimates were made at the beginning of...
“Blast it!” said David Wilson, 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’ specifications 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...
"Blast it!" said David Wilson, 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' specifications 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...
"Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $4,000. 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' specifications 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...
“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $4,000. 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’ specifications 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...
"Blast it!" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $2,000. 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' specifications 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...
“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $4,000. 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’ specifications 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...
“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $4,000. 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’ specifications 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...
“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $2,000. 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’ specifications 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....