Blast it! said David Wilson, president of Teledex Company. We've just lost the bid on the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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. The following estimates were made at the beginning of the year: Manufacturing overhead Direct labor Fabricating $ 385,000 $ 220,000 Department Machining $ 440,000 Assembly $ 99,000 $ 110,000 $ 330,000 Total Plant $ 924,000 $ 660,000 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: Fabricating Department Machining Direct materials $ 5,000 Direct labor $ 6,800 $ 300 $ 600 Assembly $ 3,400 Total Plant $ 8,700 $ 8,200 Manufacturing overhead ? ? ? $ 15,600 ? Required: 1. 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? Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Using the company's plantwide approach, compute the plantwide predetermined rate for the current year. Predetermined overhead rate % of direct labor cost < Required 1A Required 1B > Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Using the company's plantwide approach, determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost applied < Required 1A Required 2A > Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Compute the predetermined overhead rate for each department for the current year. Predetermined Overhead Rate Fabricating department % of direct labor cost Machining department % of direct labor cost Assembly department % of direct labor cost < Required 1B Required 2B > Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost applied Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). What was the company's bid price on the Koopers job using a plantwide predetermined overhead rate? Company's bid price Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead cost? Company's bid price 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. The following estimates were made at the beginning of the year: Manufacturing overhead Direct labor Fabricating $ 385,000 $ 220,000 Department Machining $ 440,000 Assembly $ 99,000 $ 110,000 $ 330,000 Total Plant $ 924,000 $ 660,000 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: Fabricating Department Machining Direct materials $ 5,000 Direct labor $ 6,800 $ 300 $ 600 Assembly $ 3,400 Total Plant $ 8,700 $ 8,200 Manufacturing overhead ? ? ? $ 15,600 ? Required: 1. 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? Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Using the company's plantwide approach, compute the plantwide predetermined rate for the current year. Predetermined overhead rate % of direct labor cost < Required 1A Required 1B > Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Using the company's plantwide approach, determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost applied < Required 1A Required 2A > Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Compute the predetermined overhead rate for each department for the current year. Predetermined Overhead Rate Fabricating department % of direct labor cost Machining department % of direct labor cost Assembly department % of direct labor cost < Required 1B Required 2B > Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. Manufacturing overhead cost applied Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). What was the company's bid price on the Koopers job using a plantwide predetermined overhead rate? Company's bid price Required 1A Required 1B Required 2A Required 2B Required 4A Required 4B Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead cost? Company's bid price
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Plantwide versus Departmental Overhead Rates; Underapplied or Overapplied Overhead Blast it! said David Wilson, president of Teledex Company. Weve just lost the bid on the Koopers job by $2,000. It...
-
Blast it! said David Wilson, president of Teledex Company. Weve just lost the bid on the Koopers job by $2,000. It seems were either too high to get the job or too low to make any money on half the...
-
b) Salt enhances bioavailability. Taking a weak acid as an example, explain how salt in gastric fluid has better absorption compared to its acid form.
-
Verify that the collision between the proton and the nitrogen nucleus in Example 26.4 is elastic.
-
A direct calculation shows that How close do you come to this value by using the Trapezoidal Rule with n = 6? Simpsons Rule with n = 6? Try them and find out. JO 2 sin x dx = .
-
Many single women and married couples use donated sperm to conceive children each year. Pennsylvania resident Donna Donovan decided to use donated sperm from Idant Laboratories, a New York sperm bank...
-
You are provided with the following information for Matthew Inc. for the month ended October 31, 2014. Matthew uses a periodic method for inventory. Instructions (a) Calculate (i) ending inventory ,...
-
An upstart phone company has only two potential large customers, Firm A and Firm B. Firm A's monthly demand for phone calls is Q1 = 2,800 200p (with p measured in cents) and Firm 2's is Q2 =5,000...
-
Internal rate of return and modified internal rate of return For the project shown in the following table.. calculate the internal rate of return (IRR) and modified internal rate of return (MIRR) If...
-
. Calculate the total resistance of a circuit where a fan (2 ohms) and 4 lights (1 ohm each) are all connected in parallel. O 6.00 3.00 0.150 0.22 0
-
If the hub gear and the ring gear R have angular velocities @ (rad/s) and WR (rad/s), respectively, determine the angular velocity ws (rad/s) of the spur gear S? 1 a. w = (-5w +3wH) 2 1 b. == (5WR +...
-
-0 Compute det B, where B = 01 1 12 2 1
-
The monochromatic emissivity of a diffuse-surface at 1600 K varies with wavelength in the following manner : = 0.4 for 0
-
Fig. 4.45 shows a one-arm device caliper and a three-arm bow-spring device caliper obtained in the same borehole in- terval. Explain the disagreement between the two logs in both the thick and thin...
-
Read the articles given below and write short summary for each article. De Menezes, L. M., & Wood, S. (2015, August). Quality Management, Job-related Contentment,and Performance: an empirical...
-
Linda Lopez opened a beauty studio, Lindas Salon, on January 2, 2011. The salon also sells beauty supplies. In January 2012, Lopez realized she had never filed any tax reports for her business and...
-
The financial records of Dunbar Inc. were destroyed by fire at the end of 2015. Fortunately, the controller had kept the following statistical data related to the income statement. 1. The beginning...
-
Maher Inc. reported income before income tax during 2015 of 790,000. Additional transactions occurring in 2015 but not considered in the 790,000 are as follows. 1. The corporation experienced an...
-
Presented below is the trial balance of Thompson Corporation at December 31, 2015. Instructions Prepare an income statement and a retained earnings statement. Assume that the only changes in retained...
Study smarter with the SolutionInn App