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 | 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 |
| Direct labor cost | $ | 237 |
| 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
Expert Solution
| 1 | ||
| a | ||
| Variable manufacturing overhead cost | 2.60 | |
| Fixed manufacturing overhead cost | 2.80 | =266000/95000 |
| Plantwide predetermined overhead rate | 5.40 | per DLH |
| b | ||
| Direct materials | 273 | |
| Direct labor cost | 237 | |
| Overhead applied | 81 | =15*5.40 |
| Total manufacturing cost of Job 550 | 591 | |
| c | ||
| Total manufacturing cost of Job 550 | 591 | |
| Add: Markup | 1182 | |
| Selling price | 1773 | |
| 2 | ||
| 1 | ||
| a | ||
| Variable manufacturing overhead cost | 5.20 | |
| Fixed manufacturing overhead cost | 5.60 | =266000/47500 |
| Plantwide predetermined overhead rate | 10.80 | per MH |
| b | ||
| Direct materials | 273 | |
| Direct labor cost | 237 | |
| Overhead applied | 54 | =5*10.80 |
| Total manufacturing cost of Job 550 | 564 | |
| c | ||
| Total manufacturing cost of Job 550 | 564 | |
| Add: Markup | 1128 | |
| Selling price | 1692 |
ekkarill92 answered 1 year 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
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Direct labor-hours required to support estimated
production
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Machine-hours required to support estimated production
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Fixed manufacturing overhead cost
$
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Variable manufacturing overhead cost per direct labor-hour
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Variable manufacturing overhead cost per machine-hour
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During the year, Job 550 was started and completed. The
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Landen Corporation uses a job-order costing system. At the beginning of the year, the company made...
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Machine-hours required to support estimated production
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Fixed manufacturing overhead cost
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Variable manufacturing overhead cost per direct labor-hour
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Variable manufacturing overhead cost per machine-hour
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During the year, Job 550 was started and completed. The
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Landen Corporation uses a job-order costing system. At the beginning of the year, the company made...
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Machine-hours required to support estimated production
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Fixed manufacturing overhead cost
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Variable manufacturing overhead cost per direct labor-hour
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Variable manufacturing overhead cost per machine-hour
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During the year, Job 550 was started and completed. The
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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
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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
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Fixed manufacturing overhead cost
$
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Variable manufacturing overhead cost per direct labor-hour
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During the year, Job 550 was started and completed. The
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8.Landen Corporation uses a job-order costing system. At the beginning of the year, the company made...
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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
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Fixed manufacturing overhead cost
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420,000
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