Question
In: Accounting
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 | 140,000 | |
| Machine-hours required to support estimated production | 70,000 | |
| Fixed manufacturing overhead cost | $ | 784,000 |
| Variable manufacturing overhead cost per direct labor-hour | $ | 2.00 |
| Variable manufacturing overhead cost per machine-hour | $ | 4.00 |
During the year, Job 550 was started and completed. The following information is available with respect to this job:
| Direct materials | $ | 175 |
| Direct labor cost | $ | 225 |
| 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.)
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Solutions
ekkarill92 answered 2 years agoRelated Solutions
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
80,000
Machine-hours required to support estimated production
40,000
Fixed manufacturing overhead cost
$
240,000
Variable manufacturing overhead cost per direct labor-hour
$
1.80
Variable manufacturing overhead cost per machine-hour
$
3.60
During the year, Job 550 was started and completed. The
following information is available with respect to this job:
Direct materials
$
207...
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
100,000
Machine-hours required to support estimated production
50,000
Fixed manufacturing overhead cost
$
280,000
Variable manufacturing overhead cost per direct labor-hour
$
2.80
Variable manufacturing overhead cost per machine-hour
$
5.60
During the year, Job 550 was started and completed. The
following information is available with respect to this job:
Direct materials
$
216...
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 120,000
Machine-hours required to support estimated production 60,000 Fixed
manufacturing overhead cost $ 336,000 Variable manufacturing
overhead cost per direct labor-hour $ 3.60 Variable manufacturing
overhead cost per machine-hour $ 7.20 During the year, Job 550 was
started and completed. The following information is available with
respect to this job: Direct materials $ 206...
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
110,000
Machine-hours required to support estimated production
55,000
Fixed manufacturing overhead cost
$
308,000
Variable manufacturing overhead cost per direct labor-hour
$
3.20
Variable manufacturing overhead cost per machine-hour
$
6.40
During the year, Job 550 was started and completed. The
following information is available with respect to this job:
Direct materials
$
187...
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
95,000
Machine-hours required to support
estimated production
47,500
Fixed manufacturing overhead cost
$
266,000
Variable manufacturing overhead cost
per direct labor-hour
$
2.60
Variable manufacturing overhead cost
per machine-hour
$
5.20
During the year, Job 550 was started and completed. The
following information is available with respect to this job:
Direct materials
$
273...
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
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...
8.Landen Corporation uses a job-order costing system. At the beginning of the year, the company made...
8.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...
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates
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
150,000
Machine-hours required to support estimated production
75,000
Fixed manufacturing overhead cost
$
420,000
Variable manufacturing overhead cost per direct labor-hour
$
4.60
Variable manufacturing overhead cost per machine-hour
$
9.20
During the year, Job 550 was started and completed. The following information is available with respect to...
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year,...
Ravsten Company uses a job-order costing system. On January 1,
the beginning of the current year, the company’s inventory balances
were as follows:
Raw materials
$
25,500
Work in process
$
13,800
Finished goods
$
31,900
The company applies overhead cost to jobs on the basis of
machine-hours. For the current year, the company estimated that it
would work 37,900 machine-hours and incur $151,600 in manufacturing
overhead cost. The following transactions were recorded for the
year:
a.
Raw materials...
Ravsten Company uses a job-order costing system. On January 1, the beginning of the current year,...
Ravsten Company uses a job-order costing system. On January 1,
the beginning of the current year, the company’s inventory balances
were as follows:
Raw materials
$
17,500
Work in process
$
9,760
Finished goods
$
29,280
The company applies overhead cost to jobs on the basis of
machine-hours. For the current year, the company estimated that it
would work 36,300 machine-hours and incur $159,720 in manufacturing
overhead cost. The following transactions were recorded for the
year:
a.
Raw materials...
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