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 |
Direct labor cost | $ | 323 |
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.)
Required 1 | |||||||||
a) | Plantwided predetermined overhead rate | ||||||||
fixed manufacturing overhead cost | (180000/60000) | 3 | |||||||
variable manufacturing overhead cost per direct labor | 1 | ||||||||
Plantwided predetermined overhead rate | 4 | answer | |||||||
b) | Total manufacturing cost for job 550 | ||||||||
Direct materials | 213 | ||||||||
direct labor cost | 323 | ||||||||
overhead applied | (15*4) | 60 | |||||||
total manufacturing cost | 596 | ||||||||
c) | selling price | ||||||||
total manufacturing cost *200% | |||||||||
596*200% | |||||||||
1192 | Answer | ||||||||
Required 2 | |||||||||
a) | Plantwided predetermined overhead rate | ||||||||
fixed manufacturing overhead cost | (180000/30000) | 6 | |||||||
variable manufacturing overhead cost per machine hour | 2 | ||||||||
Plantwided predetermined overhead rate | 8 | answer | |||||||
b) | Total manufacturing cost for job 550 | ||||||||
Direct materials | 213 | ||||||||
direct labor cost | 323 | ||||||||
overhead applied | (5*8) | 40 | |||||||
total manufacturing cost | 576 | ||||||||
c) | selling price | ||||||||
total manufacturing cost *200% | |||||||||
576*200% | |||||||||
1152 | Answer | ||||||||
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 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...
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 160,000 Machine-hours required to support estimated production 80,000 Fixed manufacturing overhead cost $ 480,000 Variable manufacturing overhead cost per direct labor-hour $ 5.00 Variable manufacturing overhead cost per machine-hour $ 10.00 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 240...
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 65,000 Machine-hours required to support estimated production 32,500 Fixed manufacturing overhead cost $ 195,000 Variable manufacturing overhead cost per direct labor-hour $ 1.20 Variable manufacturing overhead cost per machine-hour $ 2.40 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 250...
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 125,000 Machine-hours required to support estimated production 62,500 Fixed manufacturing overhead cost $ 350,000 Variable manufacturing overhead cost per direct labor-hour $ 3.80 Variable manufacturing overhead cost per machine-hour $ 7.60 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 201...
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...
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 160,000 80,000 $ 480,000 $ 5.00 $ 10.00 During the year, Job 550 was started and completed. The following information is available with respect to this job: $ 240 $ 233...
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...
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 115,000 57,500 $322,000 $ 3.40 $ 6.80 During the year, Job 550 was started and completed. The following information is available with respect to this job: $ 252 $ 370 Direct...
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 155,000 77,500 $465,000 $ 4.80 $ 9.60 During the year, Job 550 was started and completed. The following information is available with respect to this job: $ 210 $ 349 Direct...