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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 85,000 42,500 $ 238,000 $ 2.20 $4.40 Variable manufacturing overhead cost per direct labor-hour Variable manufacturing overhead cost per machine-hour During the year, Job 550 was started and completed. The following information is available with respect to this job. $ 208 $ 334 15 5 Direct materials Direct labor cost Direct labor-hours Machine-hours 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°

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 85,000 42,500 $ 238,000 $ 2.20 $4.40 Variable manufacturing overhead cost per direct labor-hour Variable manufacturing overhead cost per machine-hour During the year, Job 550 was started and completed. The following information is available with respect to this job. $ 208 $ 334 15 5 Direct materials Direct labor cost Direct labor-hours Machine-hours 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°

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter5: Product And Service Costing: Job-order System
Section: Chapter Questions
Problem 21E: Lorrimer Company has a job-order cost system. The following debits (credits) appeared in the...
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(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.) 1 Direct labor-hours 1a. Predetermined overhead rate 1b Total manufacturing cost of Job 550 1c Selling price - 2 Machine-hours 2a Prodetermined overhead rate 2b. Total manufacturing cost of Job 550 2c Selling price per DLH per MH
Transcribed Image Text:(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.) 1 Direct labor-hours 1a. Predetermined overhead rate 1b Total manufacturing cost of Job 550 1c Selling price - 2 Machine-hours 2a Prodetermined overhead rate 2b. Total manufacturing cost of Job 550 2c Selling price per DLH per MH
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 85,000 42,500 $ 238,000 Variable manufacturing overhead cost per direct labor-hour $ 2.20 Variable manufacturing overhead cost per machine-hour $4.40 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials Direct labor cost Direct labor-hours Machine-hours $ 208 $ 334 15 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 550²
Transcribed Image Text: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 85,000 42,500 $ 238,000 Variable manufacturing overhead cost per direct labor-hour $ 2.20 Variable manufacturing overhead cost per machine-hour $4.40 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials Direct labor cost Direct labor-hours Machine-hours $ 208 $ 334 15 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 550²
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