Chapter $2$ Homework i

Saved

Help

Save & Exit

Submit

Check my work

$4$

$1$

$4$

points

Skipped

Landen Corporation uses job$-$order costing. At the beginning of the year, it made the following estimates:

$\backslash$table$[[$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\mathrm{.}20],[$Variable manufacturing overhead cost per machine$-$hour,$$2\mathrm{.}40]]$

During the year, Job $550$ was started and completed. The following information pertains to this job:

$\begin{array}{cc}\text{D}\text{i}\text{r}\text{e}\text{c}\text{t}\text{m}\text{a}\text{t}\text{e}\text{r}\text{i}\text{a}\text{l}\text{s}& \text{\$}250\\ \text{D}\text{i}\text{r}\text{e}\text{c}\text{t}\text{l}\text{a}\text{b}\text{o}\text{r}cost& \text{\$}318\\ \text{D}\text{i}\text{r}\text{e}\text{c}\text{t}\text{l}\text{a}\text{b}\text{o}\text{r}-\text{h}\text{o}\text{u}\text{r}\text{s}& 15\\ \text{M}\text{a}\text{c}\text{h}\text{i}\text{n}\text{e}-\text{h}\text{o}\text{u}\text{r}\text{s}& 5\end{array}$

Required:

Assume 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 $550?$

Assume 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 $550?$

Note: 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.

$\backslash$table$[[1.$ Direct labor$-$hours:,,$],[1$a$.$ Predetermined overhead rate,,per DLH$],[1$b$.$ Total manufacturing cost of Job $550,,],[1$c$.$ Selling price,,$],[2.$ Machine$-$hours:,,$],[2$a$.$ Predetermined overhead rate,,per MH$],[2$b$.$ Total manufacturing cost of Job $550,,],[2$c$.$ Selling price,,$]]$